The U.S. Department of Justice’s Antitrust Division has requested additional information from Tyson Foods and Hillshire Brands concerning Tyson’s pending acquisition of Hillshire. The request, according to a Tyson Foods press release, relates to only a very small portion of the proposed combined business and that the companies are cooperating so the review can be completed as soon as possible.

On July 2, Hillshire Brands, maker of brands like Jimmy Dean, Ball Park and State Fair, accepted an offer to be purchased by poultry, pork and food company Tyson Foods for an estimated price of $8.55 billion or $63 a share.

Department of Justice urged to scrutinize Tyson-Hillshire transaction

The Department of Justice had been urged by consumer groups to heavily scrutinize the proposed Tyson-Hillshire merger. Less than one week ago, Sen. Chuck Grassley, R-Iowa, wrote a letter, also asking the agency to give the proposed transaction a long, hard look.

“I am concerned about how this proposed acquisition could increase concentration as well as decrease competition in the pork industry in the United States.  I also am concerned about the impact on consumer choice and the price of pork products,” Grassley wrote.

“Independent and small pork producers are concerned with potential abuses related to the practice of “tie-in” sales of sows with market hogs.  I have heard concerns that the transaction will result in significantly reduced competition and market access for slaughter sows if certain buying stations are not divested.  Specifically, these producers are worried that the transaction will run afoul of Packers and Stockyards Policy Statement 203.19, which governs the conflict of interest rules for packers operating as a livestock dealer or market agency.

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“I urge the Antitrust Division to thoroughly examine this acquisition to protect competition in the pork industry.  In particular, I urge the Antitrust Division to scrutinize the implications of this transaction on the sow market.”

Tender offer for shares of Hillshire Brands extended

As a result of the Department of Justice’s second requests, Tyson Foods has extended the offering period of its previously announced tender offer to purchase all of the outstanding shares of common stock of Hillshire Brands for $63 per share.

The offer, which was previously scheduled to expire at midnight, EDT, August 12, has been extended until midnight, EDT, August 19, unless it is extended further under the circumstances set forth in the merger agreement.  All terms and conditions of the offer shall remain unchanged during the extended period. 

Tyson and Hillshire Brands continue to expect that the transaction, which remains subject to customary closing conditions, will be completed by or before September 27, the last day of the Tyson Foods fiscal year.