Smithfield, the world’s largest pork processor and hog producer, and Shuanghui International announced the proposed deal in May, triggering a review by the Committee on Foreign Investment in the United States (CFIUS).
The committee, led by Treasury Secretary Jacob Lew, is charged with determining whether purchases of U.S. businesses by foreign interests could threaten national security.
Law provides for a 30-day review following notification of a potential acquisition. After that CFIUS has the option to extend the inquiry for up to 45 days. Smithfield said Wednesday that CFIUS had chosen to move to the second phase, potentially extending the review into September.
The decision comes amid concerns raised by members of Congress about the food safety and national security implications of the blockbuster deal.
In 2011, it was revealed that some Shuanghui products contained a hazardous and banned chemical used to make meat leaner. The case was just one part of an ongoing scandal involving tainted or fake Chinese meat.
Smithfield president Larry Pope told lawmakers earlier this month that the acquisition would not affect the quality of the Smithfield operation, and would bring more jobs to the United States.
On Wednesday, Smithfield said the firms would continue to cooperate with CFIUS.
“Smithfield and Shuanghui International continue to expect the transaction to close in the second half of 2013,” the firm said in a written statement.