Smithfield's buyout of Premium Standard Farms agreed by US authorities
The US Government has given the go ahead to the proposed merger of Premium Standard Farms by Smithfield Foods.
The Justice Department said its anti-trust investigation concluded the proposed acquisition by Smithfield Foods Inc. of Premium Standard Farms "is not likely to harm competition, consumers or farmers."
Tyson, Hormel and Swift are among competitors who will keep the newly merged firm from controlling the market, regulators said.
Smithfield Food based in Smithfield, Virginia, is the largest hog producer as well as the largest pork packer and processor, with annual revenues of more than $11bn. It has packing plants in Iowa, South Dakota, Nebraska, Illinois, North Carolina and Virginia.
Premium Standard Farms based in Kansas City, is the second-largest hog producer and sixth-largest pork packer and processor in the United States, with annual revenues of about $900m It owns plants in Missouri and North Carolina.
The federal regulators said they concluded that if the newly merged firm attempted to lower prices offered to hog farmers, the farmers would be able to "credibly threaten to ship them to numerous packing plants ... including to facilities owned by Cargill, Tyson and Hormel.