- Cargill and Continental Grain Company completed their long-delayed $4.53 billion purchase of Sanderson Farms, the companies said in a statement. The acquisition was announced on August 9, 2021, and creates the third-largest U.S. poultry processor. Sanderson shareholders are receiving $203 per share.
- The buyers said as part of the deal, they will combine Sanderson Farms with Wayne Farms, a subsidiary of Continental Grain, forming a new privately held poultry business. Clint Rivers, currently the CEO of Wayne Farms, will run the new venture called Wayne-Sanderson Farms.
- The closing of the deal — which was expected to occur in December 2021 or early 2022 — was delayed by a Department of Justice review of the transaction. Democratic lawmakers also have criticized the transaction, citing “significant antitrust concerns.”
Nearly a year after the sweeping takeover was announced, Cargill and Continental finally have their prize.
The deal has been slowed for months by antitrust review, and the buyers were rumored to be discussing concessions with the DOJ as recently as this week to clear the way for the transaction to close.
The DOJ has not yet commented on the merger agreement, or whether concessions were made.
Frank Singleton, a spokesman for Wayne-Sanderson Farms, said the company was “glad to have the DOJ process behind us and we're excited about moving ahead with the new company." He declined to comment further about the DOJ or any concessions that may have been made.
The combination of Wayne and Sanderson brings together two companies with different customer bases that could benefit from each other’s strengths, Rivers told Food Dive last November. Sanderson has a huge presence in retail stores such as H-E-B, Walmart and Albertsons with its trays of fresh chicken. Wayne is largely focused on foodservice and restaurants, including Chick-fil-A and Jack in the Box.
Together, the two companies would control roughly 15% of U.S. chicken production, trailing only Tyson Foods and Pilgrim’s Pride.
“This is an opportunity that doesn’t come along very often,” Rivers said last year. “We wanted to grow [Wayne] as a business for a long time. And over the years have had many conversations about how we can do that.”
The approval of the deal comes amid a stricter stance on consolidation in the meat and poultry space by the White House.
President Joe Biden has called out consolidation in the meat and poultry space for increasing prices for consumers and squeezing out smaller processors. In poultry, the top four processing firms — Tyson, Pilgrim’s Pride, Sanderson and Perdue — control 54% of the market, according to the administration.
The poultry industry also has been grappling with charges of price-fixing among the biggest producers, leading to significant settlements and even some criminal charges. Meanwhile, the Justice Department recently failed in its third attempt to convict former and current leaders at Pilgrim’s Pride and Claxton Poultry Farms in a price-fixing case.