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On August 9th, Cargill, Continental Grain Company, and Sanderson Farms, Inc. announced a definitive agreement for a joint venture between Cargill and Continental Grain to acquire Sanderson Farms for a value of $4.53 billion.
The same day Cargill officially announced the acquisition on its website, Senate Judiciary Committee ranking member Chuck Grassley, R-Iowa, sent a letter to Mr. Richard A. Powers, Acting Assistant Attorney General, Antitrust Division from the U.S. Department of Justice expressing concerns about the mentioned deal.
“I write to express concerns with Cargill and Continental Grain Company’s recently announced proposed joint acquisition of Sanderson Farms for a total equity value of $4.53 billion. At closing, Cargill and Continental Grain will combine Sanderson Farms, the third largest poultry producer in the United States, with Wayne Farms, currently a subsidiary of Continental Grain, to form a new poultry business”, said Grassley in the letter.
Upon completion of the transaction, Cargill informed the desire to combine Sanderson Farms and Wayne Farms (one of Continental Grain’s subsidiaries) to create a leading poultry business in the U.S., which led to raise concerns of the Republican senator.
“The combination of Sanderson Farms and Wayne Farms will create a best-in-class U.S. poultry company with a high-quality asset base, complementary operating cultures, and an industry-leading management team and workforce. The new company will be well positioned to enhance its service to customers across retail and food service and drive organic growth in an industry fueled by affordability and key consumer trends around the health, sustainability, and versatility of chicken”, can be read in the statement released by Cargill.
However, according to analysts in the poultry industry,
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