Antitrust regulators are hitting the pause button on the merger between Wayne Farms and Sanderson Farms, worried that it would add to concentration in the poultry processing market.
Cargill Inc. and Continental Grain Co., which owns Wayne Farms, announced a deal in August whereby the two companies would buy Sanderson Farms and merge it with Wayne Farms. The new company would have an estimated income of about $5.8 billion and a roughly 15% share of the U.S. poultry market.
When the deal was announced, U.S. Sen. Charles Grassley (R-Iowa) asked the U.S. Department of Justice to look into it on antitrust grounds. The DOJ has done so, submitting requests on Dec. 20 for additional information and documents, according to a securities filing by Sanderson Farms. The DOJ’s action resets the clock on the deal, extending the review period for 30 days past the date of compliance with the current request.