A federal judge on Friday rejected the Justice Department's antitrust challenge to United States Sugar Corp.'s acquisition of a rival processor, Imperial Sugar Co.

The ruling issued Friday by Maryellen Noreika of the U.S. District Court for Delaware said the merger wouldn’t violate antitrust provisions of the Clayton Act. The opinion was sealed, but parties to the lawsuit were given until next Thursday to submit a redacted version.

The department, which could appeal the ruling, had argued that the acquisition of Imperial from agribusiness giant Louis Dreyfus Co. would allow U.S. Sugar and American Sugar Refining to control the overwhelming majority of sugar sales across the Southeast.

“We are disappointed in the court’s decision not to block this merger, which would combine the world’s largest sugar cane refiner with one of its primary competitors in the Southeastern United States and increase reliance on foreign imports,” Assistant Attorney General Jonathan Kanter said in a statement.

“Further consolidation in the market for this important kitchen staple will have real-world consequences for millions of Americans. We are reviewing the opinion and will determine next steps shortly.”

The department’s challenge to the merger, filed in November 2021, was in line with the Biden administration’s push to restrict corporate mergers and industry consolidation.

U.S. Sugar issued a statement Sunday challenging Kanter's characterization of the merger. "Al Khaleej Sugar in Dubai is considered the largest cane sugar refinery in the world with 6000 tons per day capacity, which is double the size of ours," the statement said. U.S. Sugar also said the merger could result in increased usage of American sugar, since Imperial would gain access to U.S. Sugar's domestic supplies. 

U.S. Sugar, which operates a large sugar refinery in Florida, markets its sugar through Minnesota-based United Sugars Corp., a cooperative owned by U.S. Sugar, American Crystal Sugar Co., Minn-Dak Farmers Cooperative, and Wyoming Sugar Co. Louis Dreyfus had said the merger would "create production, logistics and supply chain synergies and efficiencies that will benefit U.S. consumers."

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