DOJ Brings Two Merger Challenges

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Last week, the Department of Justice (DOJ) filed two civil antitrust lawsuits, challenging, on May 10, the consummated merger between George’s Inc. and Tyson Foods and, on May 12, the proposed acquisition by Verifone Systems, Inc. of Hypercom Corp. Neither transaction was subject to the pre-merger notifications under the Hart-Scott-Rodino Improvements Act of 1976.

In U.S. v. George’s Foods, LLC, the DOJ challenges the consummated transaction between George’s Inc. and Tyson Foods, two chicken processing companies in Virginia’s Shenandoah Valley. The lawsuit requests that the court declare the acquisition unlawful under Section 7 of the Clayton Act and to require equitable relief in the form of the divestiture of one of the company’s processing plants. The press release regarding the lawsuit is available at http://www.justice.gov/opa/pr/2011/May/11-at-593.html.

On March 18, George’s Foods announced its intention to acquire Tyson’s Harrisonburg, Virginia, chicken processing plant. The acquisition was not reportable under the HSR Act because the purchase price was below the minimum threshold. The DOJ’s Antitrust Division opened an investigation into the acquisition and issued Civil Investigative Demands (equivalent to a Second Request) seeking information from the companies.

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