Smithfield Foods will pay a US$900,000 fine to settle allegations that the company breached competition regulations in its 2006 merger with Premium Standard Farms.
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According to a statement released by the US Justice Department, antitrust regulators accused Smithfield of failing to observe the pre-merger waiting requirement for companies to remain independent until the acquisition received regulatory clearance.
The agency’s Antitrust Division said that Smithfield engaged in a practice known as “gun jumping” because it took operational control of a significant segment of the Premium Standard’s business before the waiting period expired.
“Merging companies must remain independent in their ordinary business operations, including purchasing decisions, until the end of the pre-merger waiting period,” Christine Varney, the department’s antitrust chief, said.
“Observing the waiting period ensures that the marketplace remains competitive which ultimately benefits consumers.”
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By GlobalDataSmithfield completed its $810m acquisition of Premium Standard Farms in May 2007.
