The Department of Justice announced today that it will require Tyson Foods Inc. to divest Heinold Hog Markets, its sow purchasing business, in order to proceed with its $8.5 billion acquisition of The Hillshire Brands Company. The department said that, without the required divestiture, the transaction would have combined companies that account for more than a third of sow purchases from U.S. farmers, thereby likely reducing competition for purchases of sows from farmers.
Sows are sold by farmers for processing into sausage. Both Tyson’s Heinold Hog Markets and Hillshire buy sows from U.S. farmers. Heinold Hog Markets buys sows from farmers, sorts the sows at buying stations and resells and trucks the sows to sausage producers. Hillshire buys sows directly from farmers, which it then makes into sausage sold under the Jimmy Dean and Hillshire Farm brands. The acquisition of Hillshire by Tyson Foods Inc. would combine two major purchasers of sows from farmers in the United States 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.
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. Tyson Hog Markets 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.
The Hillshire Brands Company is a Maryland corporation with its principal place of business in Chicago, Illinois. Hillshire’s total revenues were approximately $3.9 billion for the year ended June 29, 2013.
Wednesday, August 27, 2014/Department of Justice/
Office of Public Affairs/ USA