12:42 PM CDT, July 24, 201
A coalition of farmers, ranchers and consumers have urged the Justice Department to take more time to consider the complicated merger of Tyson Foods Inc. and Hillshire Brands Co.
The Justice Department, which is reviewing the deal this week, usually spends 14 days considering cases like these. The group of 82 farm, ranch, consumer and faith-based organizations said in a letter today they want the department to extend its review to 30 days.
"Tyson’s takeover of Hillshire certainly warrants further investigation by the Department of Justice and should be stopped," President of the National Farmers Union Roger Johnson said in a statement. "It’s time for the Justice Department to enforce our anti-trust laws."
Arkansas-based Tyson and Chicago-based Hillshire hope to make the merger official in late September. Both companies declined to comment and the Justice Department did not immediately respond to a request for comment.
The issue for consumers, according to Food & Water watch research director Patrick Woodall, is that they could see higher prices at the grocery store.
“Having the largest meat company buy another one of the largest meat companies gives Tyson a much stronger grip on the entire food chain,” Woodall said.
The groups say that the merger would make it possible for “Tyson to undermine Hillshire’s sausage and lunchmeat rivals by disrupting their access to pork supplies” and hampering competition.
Last month, Hillshire won a richer-than-expected premium from Tyson, at $63 a share in cash, which works out to about $7.8 billion, or $8.55 billion including Hillshire’s outstanding debt. Tyson CEO Donnie Smith said the premium was justified by growth opportunities in breakfast and portable and prepared foods, such as Hillshire Farm and Jimmy Dean brands.
Hillshire was created after Sara Lee spun off its European coffee and tea business in 2012 and had long been seen as a potential acquisition candidate.
The coalition has sent similar letters to the Justice Department in the past, asking them to take more time to consider the proposed Albertsons-Safeway and Sysco-U.S. Foods mergers and recent Cargill-ConAgra joint venture.
Chandler Goule, senior vice president of Programs at the National Farmers Union, said the Department of Justice never responded to their requests, adding that more farmers, ranchers and consumers need to reach out to their local representatives.
“We have laws on the books,” Goule said, “and they’re just flat out not being enforced.”
Jessica Wohl contributed
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