Justice Department allows JBS to add 2 beef packing plants

WASHINGTON, April 5, 2013 – The Department of Justice confirmed today that its Antitrust Division will not stand in the way of JBS USA’s acquisition of cow and bull slaughter plants at Omaha, Neb., and Nampa, Idaho, from bankrupt Canadian firm XL Foods. JBS USA’s parent company announced yesterday that it intends to close the transaction Monday. Agri-Pulse first reported the pending approval on April 3, 2013.

“The Antitrust division conducted an extensive indication by interviewing a significant number of individuals, including farmers, auction houses that sell cows bulls on behalf of farmers, retailers and competing meat packers and reviewed documents and other information from the parties and third parties,” DOJ Spokeswoman Gina Talamona told Agri-Pulse.

“We concluded that the transaction was unlikely to harm the purchase of cows and bulls [from producers] and the sale of boxed beef to consumers,” she said. “Our investigation focused on whether the proposed transaction would harm competition at Tolleson, Ariz.; Green Bay, Wis., and Omaha plants by limiting the number of purchasers available. We concluded that it was unlikely to harm those who sell cows and bulls because there are multiple alternative buyers.”

In a statement issued at its headquarters in Sao Paolo, Brazil, JBS S.A. that its U.S. subsidiary would assume ownership of the two plants, each with capacity to process 1,100 head of cattle per day. “The beef processing plant in Nampa is currently idle and the company has no immediate plans to reopen the facility,” it added.

JBS completed the acquisition Jan. 14 of some Canadian operations of XL Foods including a beef packing plant in Brooks, Alta.; a beef packing plant in Calgary, a feedlot in Brooks and the adjacent farmland acreage supporting the feedlot operation. JBS said it will not assume XL Foods’ debt or liabilities.

The DOJ spokeswoman declined to comment on whether it had issued a “second request” for information – a step in the investigatory process that indicates heightened concern – as requested by the Ranchers-Cattlemen Action Legal Fund United Stockgrowers of America (R-CALF USA) and 37 allied groups in a letter late last year urging DOJ to “undertake an expanded, probing, and in-depth investigation” into the proposed acquisition.

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