OldDog/NewTricks
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PORK NEWS
Legislators challenge Smithfield/Premium Standard merger
by Ann Bagel on 9/21/2006 for Meatingplace.com
Sen. Charles Grassley (R-Iowa) and Sen. Tom Harkin (D-Iowa) have asked the U.S. Department of Justice to take a closer look at the proposed merger between pork processors Smithfield Foods and Premium Standard Farms.
Smithfield earlier this week announced its plans to buy Premium Standard. (See Smithfield buys Premium Standard Farms for $810 million, Meatingplace.com, Sept. 18, 2006.)
In a letter to the Justice Department's antitrust division, Grassley contended the merger would hurt independent farmers by reducing the number of places they can sell their hogs. "I have strong reservations about this proposal and the continued trend in concentration in the pork industry," he wrote, "and, as such, I urge the Department of Justice to carefully scrutinize this transaction."
The Justice Department could block the merger on antitrust grounds or require the companies to sell off some of their operations.
Merger termination fee set
Meanwhile, Premium Standard announced Wednesday that both companies will pay a termination fee if the merger is not completed.
In a filing with the Securities and Exchange Commission, Premium Standard said it will pay about $27.4 million and Smithfield will pay $100 million if the agreement is terminated under specified circumstances.
Legislators challenge Smithfield/Premium Standard merger
by Ann Bagel on 9/21/2006 for Meatingplace.com
Sen. Charles Grassley (R-Iowa) and Sen. Tom Harkin (D-Iowa) have asked the U.S. Department of Justice to take a closer look at the proposed merger between pork processors Smithfield Foods and Premium Standard Farms.
Smithfield earlier this week announced its plans to buy Premium Standard. (See Smithfield buys Premium Standard Farms for $810 million, Meatingplace.com, Sept. 18, 2006.)
In a letter to the Justice Department's antitrust division, Grassley contended the merger would hurt independent farmers by reducing the number of places they can sell their hogs. "I have strong reservations about this proposal and the continued trend in concentration in the pork industry," he wrote, "and, as such, I urge the Department of Justice to carefully scrutinize this transaction."
The Justice Department could block the merger on antitrust grounds or require the companies to sell off some of their operations.
Merger termination fee set
Meanwhile, Premium Standard announced Wednesday that both companies will pay a termination fee if the merger is not completed.
In a filing with the Securities and Exchange Commission, Premium Standard said it will pay about $27.4 million and Smithfield will pay $100 million if the agreement is terminated under specified circumstances.
