Tyson Reaches Deal with Department of Justice on Hillshire Acquisition

Tyson Reaches Deal with Department of Justice on Hillshire Acquisition

DOJ requires Tyson's divestiture of Heinold Hog Markets to move forward with Hillshire deal

Tyson Foods, Inc. and The Hillshire Brands Company on Wednesday announced that in connection with the review of Tyson's proposed acquisition of Hillshire Brands by the Antitrust Division of the U.S. Department of Justice, Tyson and Hillshire Brands have agreed with the DOJ upon a proposed settlement which has been filed Wednesday in the U.S. District Court for the District of Columbia.

The settlement is subject to approval by the court under the traditional procedures set forth in the Anti-trust Procedures and Penalties Act, Tyson said.

According to the Department of Justice, the proposed settlement will require Tyson to divest Heinold Hog Markets, its sow purchasing business.

Hillshire Brands food products are seen on May 29, 2014 in Miami, Fla. (Photo by Joe Raedle/Getty Images)

DOJ said without the required divestiture, the transaction would have combined companies that account for more than a third of sow purchases from U.S. farmers, thereby likely reducing competition for purchases of sows from farmers.

Illinois Iowa, and Missouri attorneys general joined DOJ in the civil lawsuit filed Wednesday.  The proposed settlement to resolve the competitive concerns alleged in the department’s lawsuit was filed at the same time, DOJ said.

Related: DOJ Asks for More Info in Tyson's Acquisition of Hillshire

"Farmers are entitled to competitive markets for their products.  Today's proposed settlement will help ensure that hog breeders in the United States will continue to receive the benefits of vigorous competition when selling sows," said a statement from Bill Baer, assistant attorney general in charge of the Antitrust Division.

"Without the divestiture," Baer said, "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." 

Tyson expects that it will shortly receive termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

At that point, the applicable condition to Tyson's previously announced tender offer to purchase all of the outstanding shares of common stock of Hillshire Brands for $63 per share in cash subject to the conditions set forth in the Offer to Purchase dated July 16, 2014, with respect to expiration or termination of the waiting period under the HSR Act will be satisfied.

Related: Tyson, Hillshire Sign Definitive Merger Agreement

The offer is scheduled to expire at midnight ET on Wednesday, unless it is extended further under the circumstances set forth in the merger agreement, Tyson said.

Source: Tyson/DOJ

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