Source: Reuters
U.S. Senator Chuck Grassley, the top Republican on the Judiciary Committee, said that he was concerned about Cargill Inc and Continental Grain Co’s plan to jointly acquire chicken producer Sanderson Farms (SAFM.O).
Commodities trader Cargill and agricultural investor Continental Grain announced the $4.53 billion deal for Sanderson, the third largest U.S. chicken producer, on Monday. read more
In a letter to the Justice Department dated Tuesday, Grassley said that combining Sanderson with Wayne Farms, a subsidiary of Continental Grain, would give the combined entity 15% of the U.S. chicken market.
“I am concerned that continued mergers and acquisitions in an already concentrated poultry industry will increase consolidation, frustrate competition and reduce marketing options,” he wrote. “I also am concerned about the impact on consumer choice and price of poultry products.”
Grassley urged the department to closely scrutinize the deal, noting recent indictments for price-fixing in the chicken industry. read more
Cargill and Continental Grain did not immediately respond to a request for comment.
