By Gary Robertson

SMITHFIELD, Virginia (Reuters) - Painted pig statues grace the picturesque brick sidewalks of this small Virginia river town of 8,000, and its slogan, "Hams, History and Hospitality," probably tells visitors all they need to know about Smithfield and its relationship with Smithfield Foods, the world's largest hog producer.

Earlier this week, Smithfield Foods received a $4.7 billion buyout offer from a Chinese food company. News that an agreement had been reached and was awaiting U.S. government approval sent a shiver through the community, where it is the largest employer with a payroll of nearly 4,000 people. Worldwide, Smithfield employs 46,000.

Ham is the town's primary industry, followed by tourism.

The hope, community leaders say, is that Smithfield Food's new owners will invest in the community, not cut jobs.

Shuanghui International Holdings Ltd's agreement to buy Smithfield would be the largest acquisition of a U.S. company by a Chinese one. The bid is part of an effort to feed growing demand in China for U.S. pork.

"The best news here is that the operation stays, and at least for now the company has committed to keep the management here," said John Edwards, editor of the weekly newspaper, the Smithfield Times, as he started his day recently over coffee at the Main Street Restaurant.

"All you can do is keep your fingers crossed, hang tight and be positive about the whole thing," Edwards added.

Smithfield Foods, which processed 27.7 million hogs in 2012, built its headquarters on a sprawling campus of colonial-style buildings on the Pagan River in the center of Smithfield. It is the cultural and economic heart of the town, which was founded in 1752. On the outskirts is a plant where hams are produced.

The "Smithfield Ham" label is so revered that in 1926 the Virginia legislature enacted a statute that required any ham labeled "Smithfield" to be processed within town limits, similar to European laws governing the labeling of wines and cheeses.

Joe Luter III, Smithfield Food's chairman, is the third generation of his family to lead the company. The Luters started what would become the company in 1936 as a small packing house in Smithfield.

But production in the town began as early as the 1780s with Captain Mallory Todd, a merchant from Bermuda who began shipping hams to England. Smithfield's access to the sea, along with its climate and soil ideal for growing peanuts and corn, made it an excellent location to raise pigs and commercially export them.

SHARED WEALTH

Luter grew up in Smithfield and has shared his wealth with his hometown, creating a park and providing seed money for civic improvement projects such as brick sidewalks and historic-looking street lamps.

The Virginia Landmarks Register says Smithfield "is perhaps the best preserved of Virginia's Colonial seaports."

Randy Forbes, the Republican who represents Smithfield's Congressional district in Virginia, was measured in his response. Forbes said the potential takeover "warrants robust analysis and review to ensure the safety and security of America's citizens as well as the preservation of national economic interests, food safety, and environmental standards. I look forward to following that review process closely."䌀

Constance Rhodes, president of the Isle of Wight-Smithfield-Windsor Chamber of Commerce, said that what she likes about the pending sale is that it keeps manufacturing not only in Smithfield but in the United States.

In what now seems like prescience, Rhodes visited China last year as part of a national Chamber of Commerce initiative. She learned enough Mandarin to say, "Hello, goodbye and write my name."

Local tourism officials expect more Chinese visitors, and they want the community to put its best foot forward to make them feel welcome as they explore a small American town.

But not everyone shares those views.

Lee Diggs, a software writer who has lived in Smithfield for eight years with her husband and children, said if wealthy Chinese start buying up property, it could fundamentally change the small-town atmosphere, accentuated by graceful riverfront homes and mom-and-pop stores along Main Street.

She said she would do everything she could to discourage prospective buyers.

"I'd probably tell them it smells real bad when the wind is blowing in the right direction from the packing plants. I'd paint a negative picture, so I could keep it for myself," she said.

(Editing by Barbara Goldberg and Eric Walsh)

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