WASHINGTON, Aug. 27, 2014 – Tyson Foods has agreed to sell off its hog acquisition unit, Heinold Hog Markets, in order to win U.S. Department of Justice (DOJ) approval of its $8.5 billion purchase of Hillshire Brands. The proposed settlement needs approval from a federal district judge in Washington.
The divestiture is required to maintain competition among companies that buy sows for processing into sausage, DOJ said. Without the divesture, the transaction would combine companies that account for more than a third of sow purchases from U.S. farmers.
“Farmers are entitled to competitive markets for their products,” said Bill Baer, assistant attorney general in charge of DOJ’s Antitrust Division. “Without the divestiture, the proposed acquisition would have eliminated a significant customer for farmers’ sows and likely would have resulted in less competition in this important agricultural market.”
Three state attorneys general – from Illinois, Iowa and Missouri – joined the department in the civil lawsuit filed today in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, DOJ filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the department’s lawsuit. Under the terms of the proposed settlement, Tyson must divest Heinold in its entirety to a buyer approved by the Antitrust Division.
The proposed settlement will be published in the Federal Register, triggering a 60-day comment period, after which the court may rule on a proposed final judgement.
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