Sugar Industry Merger Challenged by Justice Department
Antitrust lawsuit alleges U.S. Sugar’s proposed acquisition of Imperial Sugar is anticompetitive
WASHINGTON—The Justice Department filed an antitrust lawsuit challenging U.S. Sugar’s proposed purchase of rival Imperial Sugar, arguing the tie-up would lead to consumers and businesses paying more for refined sugar.
The suit, filed Tuesday in a Delaware federal court, is the fourth major deal challenge in recent months from the department, which has been following through on a Biden-era enforcement pledge to take a harder line against industry consolidation.
Privately-held U.S. Sugar, headquartered in Clewiston, Fla., farms more than 200,000 acres of sugar cane in the state. In March it announced an agreement to purchase Texas-based Imperial Sugar, whose operations include a large refinery in Georgia, from Dutch-based Louis Dreyfus Company B.V. The deal was valued at about $315 million, according to the Justice Department lawsuit.
The department alleged the deal would leave most sales of refined sugar across the Southeast in the hands of only two producers, which it said was an unlawful reduction in competition that would spur higher prices for a product vital to the nation’s food supply.
“U.S. Sugar and Imperial Sugar are already multibillion-dollar corporations and are seeking to further consolidate an already cozy sugar industry,” said the department’s new antitrust chief, Jonathan Kanter, who won Senate confirmation last week.
Mr. Kanter said the deal “substantially lessens competition at a time when global supply chain challenges already threaten steady access to important commodities and goods.”
Neither U.S. Sugar nor Louis Dreyfus immediately responded to requests for comment.
When the companies announced their agreement, they said the deal would boost dependable sugar supplies with increased production and reduced costs.
Tuesday’s lawsuit marks the latest sign of the Biden administration’s tougher stance on antitrust enforcement. Earlier this year it blocked a more than $30 billion insurance-industry merger between Aon PLC and rival Willis Towers Watson PLC. It is currently challenging a partnership between American Airlines Group Inc. and JetBlue Airways Corp. as well as a deal that would combine two top publishers, Penguin Random House and Simon & Schuster.