May 8, 2007

Smithfield to finally acquire Premium Standard Farms

Smithfield Foods gets the green light to finally purchase Premium Standard Farms after a thorough investigation led by the Justice Department's antitrust division.

In a news release issued by the department, it said "The division found that the merged firm would continue to face significant competition in the sale of fresh and processed pork from its national competitors."

The department also said that "additionally, farmers who sell hogs or hog-raising services to the merged firm would have competitive alternatives that would deter the merged firm from lowering prices paid to the farmers."

Under terms of the agreement, announced last September, Smithfield will purchase Premium Standard for about US$674 million in cash and stock. Smithfield also will shoulder about US$117 million of Premium Standard's debt.