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August 27, 2014

Miller, Two States & U.S. Justice Department Require Tyson Foods to Divest Hog Market Buyer Ownersh

Joint state-federal agreement will help preserve hog market competition for farmers; Tyson to sell sow purchasing facilities, including two in Iowa

(DES MOINES, Iowa) Tyson Foods Inc. will divest ownership of Heinold Hog Markets, which operates two sow purchasing facilities in Iowa, under a pending agreement with the U.S. Justice Department, Attorney General Tom Miller, and state attorneys general in Illinois and Missouri.

The agreement, subject to a federal judge’s approval, will allow Tyson to proceed with its $8.5 billion acquisition of the Hillshire Brands Company.  Tyson’s Heinold Hog Markets operates buying facilities in Sioux City and Story City, and six more across the Midwest region, including facilities in Illinois, Indiana, Michigan, Minnesota and Nebraska.

“Our concern was that this buyout would have greatly reduced the competitive market and would affect purchase prices for Iowa hog breeders trying to sell their sows,” Miller said.  “Without the divestiture agreement we just reached, the Tyson-Hillshire deal would have combined companies that account for more than a third of all sow purchases.  That’s significant.”

DOJ, States File Lawsuit & Proposed Settlement
Miller and the attorneys general joined the U.S. Justice Department today in filing a lawsuit in the U.S. District Court for the District of Columbia to block the proposed transaction.  Simultaneously, the states and Justice Department filed a proposed settlement that, if approved, would resolve the competitive concerns alleged in the lawsuit.

Tyson-Hillshire Acquisition Raised Antitrust Concerns
Hog farmers sell sows, which are female pigs used to breed hogs, for sausage processing.

Heinold buys sows from farmers, sorts the livestock at buying stations, and resells and trucks the sows to sausage processors, including Hillshire.

Hillshire buys sows directly from farmers, which it then processes into sausage sold under the Jimmy Dean and Hillshire Farm brands.

Tyson’s Hillshire acquisition would combine two major sow purchasers and eliminate the benefit farmers have received from the competition between Hillshire and Tyson’s Heinold Hog Markets.

Under the terms of the proposed settlement, Tyson must divest Heinold Hog Markets in its entirety to a buyer approved by the Antitrust Division.

About Tyson Foods Inc.
Tyson Foods, Inc. is a Delaware corporation with its principal place of business in Springdale, Arkansas.  Tyson is one of the world’s largest meat companies.  It produces, distributes, and markets chicken, beef, pork, and prepared food products.  Tyson Hog Markets, Inc., a subsidiary of Tyson and Tyson Fresh Meats Inc., buys and resells sows through its Heinold Hog Markets division.  In 2013, Tyson had total revenues of approximately $34.4 billion; Heinold Hog Markets had overall revenues of approximately $270 million.

About Hillshire Brands Co.
The Hillshire Brands Company is a Maryland corporation with its principal place of business in Chicago, Illinois.  Hillshire is a manufacturer and marketer of brand name food products for the retail and foodservice markets, including sausage, hot dogs, and luncheon meats.  Its brand names include Jimmy Dean, Ball Park and Hillshire Farm.  Hillshire’s total revenues were approximately $3.9 billion for the year ended June 29, 2013.

Public Comment Invited
As required by the Tunney Act, the proposed settlement, along with the department’s competitive impact statement, will be published in the Federal Register.  Any person may submit written comments concerning the proposed settlement during a 60-day comment period to William H. Stallings, Chief, Transportation, Energy, and Agriculture Section, Antitrust Division, U.S. Department of Justice, 450 5th Street, N.W., Suite 8000, Washington, D.C. 20530.  At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed final judgment upon finding that it is in the public interest.


To view Complaint, click here
To view Hold Separate Stipulation and Order, click here
To view Proposed Final Judgment, click here
To view Competitive Impact Statement, click here


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