Tyson wins U.S. Justice Dept antitrust nod for Hillshire deal

Wed Aug 27, 2014 8:24pm EDT
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By Diane Bartz

WASHINGTON (Reuters) - Tyson Foods Inc (TSN.N: Quote), the largest U.S. meat processor, on Wednesday won U.S. antitrust approval for its $8.5 billion purchase of Hillshire Brands Co HSH.N.

To win approval for the merger, the companies agreed to sell Heinold Hog Markets, the U.S. Department of Justice said. The attorneys general of Iowa, Illinois and Missouri, all big hog-producing states, joined the settlement.

"Today's proposed settlement will help ensure that hog breeders in the United States will continue to receive the benefits of vigorous competition when selling sows," said Bill Baer, assistant attorney general for DOJ's antitrust division.

The two companies combined buy about 35 percent of all sows sold in the United States.

Tyson's share price rallied on the approval, rising as much as 2 percent before closing at $37.71, up 1.5 percent. Hillshire closed near steady at $62.96.

But about 10 minutes before the Justice Department announced the deal, the share prices of both companies dropped sharply and there was a large increase in stock and options volume, suggesting that traders were bracing for bad news.

Trading volume for Hillshire totaled 8.07 million shares, compared with the 50-day average of 2.54 million; of the total, trading volume, almost 5.5 million came several minutes before and after the DOJ's release, according to Reuters data.

Springdale, Arkansas-based Tyson is a massive seller of chicken, beef and pork while Chicago's Hillshire sells packaged meat brands such as Jimmy Dean, Ball Park and State Fair as well as bakery products like Sara Lee.   Continued...

Traders gather at the post that trades Tyson Foods on the floor of the New York Stock Exchange in this June 3, 2014 file photo. REUTERS/Brendan McDermid/Files