U.S. unlikely to block Chinese purchase of Smithfield By Anna Yukhananov and Andrea Shalal-Esa WASHINGTON (Reuters) - The U.S. government should soon give the go-ahead for the largest ever Chinese acquisition of a U.S. company: a Chinese food group's $4.7 billion deal to buy Smithfield Foods Inc (SFD.N), a person familiar with the matter told Reuters. Government approval of the purchase of Smithfield by Shuanghui International Holdings would be a major step forward for the deal. But it still needs shareholder approval, and at least one substantial shareholder is looking for a higher price. The bid, an effort to feed China's growing appetite for pork, has stirred concern about food safety and other issues among some U.S. politicians and faced review by a committee of several government agencies overseen by the Treasury Department. The source said approval is expected after the conclusion of a review of the proposed deal by the Committee on Foreign Investment in the United States (CFIUS), an inter-agency executive branch panel that examines foreign investment for potential threats to national security. The review was scheduled to conclude by Saturday. But the source said the Smithfield case was not much different from the 2012 takeover of AMC Theaters by China's Dalian Wanda Group for $2.6 billion, which was allowed to proceed when the CFIUS determined the deal posed no threat to national security. We have theaters in military bases. We have ham in military bases," said the person, who was not authorized to speak publicly. The Treasury Department, which oversees the work of the CFIUS committee, declined comment, saying by law, information filed with CFIUS may not be disclosed to the public. Smithfield, the world's biggest pork producer, declined to comment ahead of the panel's decision. Some lawmakers expressed concerns the deal could jeopardize U.S. food safety and raise pork prices for American consumers. In June, lawmakers urged CFIUS to involve agencies typically not part of the panel's deliberations, including the Department of Agriculture and the Food and Drug Administration. It is unclear if that happened. Lawmakers also worried an approval would encourage China to purchase other U.S. food companies. Will China or other countries seek to purchase our largest poultry, or dairy, or corn producers next? Is it in America's security interests if in a decade or two our food supply is 30, or 60, or 90 percent foreign owned?," Senator Debbie Stabenow, Democrat from Michigan and chair of the Senate Agriculture Committee, wrote in an opinion piece in Politico this week. However, most analysts familiar with the CFIUS process said the review was largely procedural and expected the deal to go through since there were no clear national security issues involved. Mark McMinimy, a senior policy analyst at Guggenheim Securities in Washington, said any deal involving China was likely to face greater scrutiny since it is viewed as a strategic competitor to the United States. " (But) I never thought food safety was a big issue for CFIUS," he said. We do not anticipate the U.S. government will raise serious objections. While the government is likely to approve the purchase, the deal could face another hurdle. Activist hedge fund Starboard Value LP announced plans to find a higher bid for the pork company. Starboard, a New York-based fund that holds a 5.7 percent stake in Smithfield, said in a letter to shareholders on Tuesday that other parties may be willing to pay more than the $34 per share cash deal proposed by Shuanghui. While the counter-proposal was not completed, the hedge fund said it planned to vote against the Smithfield-Shuanghui merger in order to buy more time to get such a bid finalized. Smithfield shares were up 0.3 percent mid-day on Thursday at $33.94 and up about 3 percent since early July. Smithfield has scheduled a special shareholder meeting on September 24 to vote on the Shuanghui proposal. Additional Reporting by Sakthi Prasad in Bangalore; Editing by Ros Krasny and Matt Driskill and David Gregorio