Sanderson Farms sale delayed by DOJ

For the purpose of reviewing a planned acquisition of Sanderson Farms, located in Laurel, Mississippi, by a joint venture between Continental Grain Co., New York, and Cargill, Minneapolis, the US Department of Justice (DOJ) is requesting more information.

The deal was supposed to close by the end of 2021 or the beginning of 2022, but according to a Securities and Exchange Commission filing (SEC), a DOJ request for additional information and documentary material extends the required waiting period until 30 days after both Sanderson and parent company Walnut Sycamore Holdings LLC have substantially complied with the DOJ’s request, unless the waiting period is terminated earlier by the DOJ or extended by agreement.

The firms anticipate that the merger would close in the first half of 2022; if not, Sanderson may have to provide Cargill and CGC a $158 million termination fee.

The SEC filing states that in the event that the merger agreement is terminated, “we may be required to use available cash that would have otherwise been available for general corporate purposes or other uses” to pay any termination fees. The payment of a termination fee could also negatively influence our financial situation and have an effect on the terms, prices, and arrangements put forth by a third party looking to buy us out or merge with us, or it could discourage them from making a rival purchase.

You may also like:

Food security in emerging nations: issues and remedies
Are drinks the secret to increasing cannabis use among consumers?
Managing the lack of labour for mushroom picking

A $4.5 billion deal has been reached between Cargill and CGC to purchase Sanderson Farms, a chicken processor. The purchase will be paid for with cash, with Sanderson Farms stockholders receiving $203 for each share. The idea is to combine Sanderson Farms with Wayne Farms, a Continental Grain affiliate.