Biden DOJ sues to block sugar merger, cites supply chain strain
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Tuesday saw the Biden administration file a lawsuit to prevent the planned merger of two major sugar industry players. They argued that such an acquisition would reduce competition and drive up prices in a period when global supply chain are already stressed.
The civil antitrust lawsuitThe lawsuit, which was filed in Delaware federal court, seeks to prevent the United States Sugar buying Imperial Sugar. Jonathan Kanter is the assistant attorney general for the Justice Department’s Antitrust Division. He stated in a press release that these corporations are competition in the sugar industry.
Kanter stated, “This deal significantly lessens competition in a time where global supply chain problems already threaten steady access of important commodities and products.”
U.S. Sugar, a Delaware corporation is privately owned and is located in Florida. Louis Dreyfus is the owner of Imperial Sugar, which is a multinational agricultural conglomerate with a Netherlands base. It is estimated that the deal will be worth approximately $315 million.
CNBC reached out to the companies for further information on the DOJ lawsuit.
Biden Administration’s history of pushing for antitrust enforcement is further reflected in the DOJ’s intervention in an important industry agreement. President Joe BidenIt was a year that marked the beginning of’s tenure at the White House. aggressive steps to combat corporate consolidationYou can do this by signing an executive order or by trying to limit, block, or restrict deals in various industries from publishing to food and airlines.
Earlier in November, the DOJ filed a lawsuit seeking to block Penguin Random House from acquiring rival Simon & Schuster for nearly $2.18 billion.
In September, the DOJ sued block a regional partnership between American Airlines and JetBlue Airways, alleging the alliance would reduce competition, lower the quality of service and drive up airfares. On Monday, the carriers argued that their partnership would help them compete better against United Airlines and Delta Air Lines. asked a federal judge to dismiss the suit.
In a Tuesday press release, Attorney General Merrick Galrland stated that “robust antitrust enforcement” is an important pillar in the Justice Department’s commitment to economic opportunity and fairness. We will vigorously challenge any anticompetitive mergers which would be harmful to American businesses and consumers.
Merrick Garland, U.S. Assistant General, announces that the Justice Department will bring a lawsuit to challenge a Georgia law on elections that has new voting limits. This was announced at a news conference held by the Department of Justice, Washington, D.C., 26 June 2021.
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U.S. Sugar’s deal with Imperial Sugar will “essentially leave the vast majority of sugar sales in the Southeast” to only two companies, according to the DOJ press release. According to the DOJ, Americans will pay more for refined Sugar as it is a major input in many foods and beverages.
Fears of a repeat coronavirus pandemic are increasing as the world heals and consumer demand grows. supply chain bottlenecks and shortfalls are also on the rise across the economy.
U.S. Sugar could acquire Imperial to merge the production of Imperial into its own. United Sugars Corporation is a cooperative that buys sugar from U.S. Sugar as well as three other refiners. The complaint claims that only two companies, United Sugar and Domino, would control nearly 75% in sugar sales in the Southeast U.S. This deal “would leave wholesale customers in the region at the mercy a cozy duopoly.”
The lawsuit states that this would lead to fragile supply chains and American families paying more for sugar and other staple food and drink products.
The complaint states that the case involves a merger between two competitors. This will lead to a concentrated market that leads to high prices and a lower supply of a vital product for our nation’s food supply.
Simply put, this is not an easy case.”
This report was contributed by Leslie Josephs, CNBC.