Tyson wins U.S. Justice Dept antitrust nod for Hillshire deal 

Tyson Foods Inc (TSN.N), the largest U.S. meat processor, on Wednesday won U.S. antitrust approval for its $8.5 billion purchase of Hillshire Brands Co (HSH.N).

To win approval for the merger, the companies agreed to sell Heinold Hog Markets, the U.S. Department of Justice said.

“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 for DOJ’s antitrust division.

The two companies combined buy about 35 percent of all sows sold in the United States.

Tyson’s share price rallied on the approval, rising as much as 2 percent before closing at $37.71, up 1.5 percent. Hillshire closed near steady at $62.96.

But about 10 minutes before the Justice Department announced the deal, the share prices of both companies dropped sharply and there was a large increase in stock and options volume, suggesting that traders were bracing for bad news.

“Although the sale of sows constitutes a small percentage of overall revenues, farmers rely on this source of income as an important contribution to their earnings,” the Justice Department said in a competitive impact statement filed with the U.S. District Court for the District of Columbia.

That court must approve the proposed settlement.

The deal had came under fire from some farm, consumer and rural organizations, as well as lawmakers.

 

Source: Reuters

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