The U.S. Department of Justice filed an antitrust lawsuit Monday to stop the acquisition of the National Beef Packing Company by Brazilian company JBS S.A. While filing the suit in the U.S. District Court for the Northern District of Illinois, DOJ announced they would not block JBS's acquisition of Smithfield Beef, which is the fifth largest beef packer in the United States. National Beef is the fourth largest packer in the U.S. and DOJ is challenging the deal, which would combine two of the top four U.S. beef packers.
"We are disappointed that the DOJ does not recognize that this transaction is pro competitive and we plan to vigorously contest the DOJ's attempt to block it," said Steve Hunt, Chief Executive Officer of U.S. Premium Beef, the owner of National Beef.
The proposed acquisition of National Beef was announced in early March. The deal is for $560 million plus the assumption of National Beef's debt. According to the Justice Department, JBS's acquisition of National would substantially restructure the beef packing industry, eliminating a competitively significant packer and placing more than 80% of domestic fed cattle packing capacity in the hands of three firms: JBS, Tyson Foods Inc., and Cargill Inc.
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