Tyson Foods, Inc. must sell its sow-buying unit, Heinold Hog Markets, to satisfy antitrust rules and proceed with its purchase of Hilllshire Brands Co. for $8.5 billion, the Justice Department said. Without the divestiture, combined companies would account for one-third of sow purchases from U.S. farmers, an unacceptably high portion, the government said. In a joint statement, Tyson and Hillshire said they agreed to the step.
The proposed settlement now needs approval by U.S. district court. Tyson said it expects to soon complete the purchase of Hillshire stock to carry out the acquisition. With revenues of more than $34 billion a year, Tyson is one of the world’s largest processors and marketers of chicken, beef and pork. Hillshire, a food processor with sales of $3.9 billion a year, owns brands such as Jimmy Dean, Sara Lee, and Ball Park. Heinold Hog Markets has revenues of $270 million.
“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 Bill Baer, assistant attorney general in charge of the Antitrust Division, in a statement.
“The pork packing industry remains overly concentrated, but at least the Justice Department prevented it from getting any worse” said the consumer group Food and Water Watch, which said the government should have demanded more divestitures.