JBS Swift USA president and CEO Wesley Batista said the Brazilian company will vigorously defend its proposed merger with National Beef Co. after the U.S. Department of Justice filed a lawsuit on Oct. 20 to block the deal.
"We disagree with the Department of Justice's decision to try and block this transaction," Batista said in a press statement. "This transaction is highly pro-competitive and will generate significant efficiencies and synergies that will benefit our cattle suppliers and our beef customers. We believe the government's case is misplaced and we look forward to defending this matter in court."
Tamara Smid, JBS USA spokeswoman, said the company "has no other comment on the matter other than what's in the (Web site) statement."
JBS S.A. also announced plans to "immediately" complete the purchase of Smithfield Beef Group Inc. for about $565 million in cash. The purchase of the beef-processing and cattle-feeding operations of the Smithfield Group includes Loveland-based Five Rivers Ranch Cattle Feeding LLC, which was previously a joint venture with Continental Grain Co.
On March 5, JBS announced the proposed acquisition of National Beef for about $970 million and the assumption of all of National Beef's debt and other liabilities at closing. The sale would combine all of National Beef's operations and facilities including National Carriers Inc. and its ownership in Kansas City Steak Co. LLC.
All of the JBS acquisitions had been awaiting approval from the Justice Department regarding possible anti-trust violations. In its lawsuit, the DOJ did not object to the proposed Smithfield Beef purchase but did find that the proposed JBS-National Beef merger would combine two of the four biggest U.S. beef processors and result in JBS acquiring more than one-third of the nation's meat production. The DOJ said the result would be lower prices paid to cattle producers and higher costs for consumers.
Colorado has joined 12 other states in the DOJ lawsuit to block the proposed merger of JBS and National Beef. Kansas-based National Beef has beef processing plants in Liberal and Dodge City, Kansas, and Brawley, Calif.