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U.S. sues to block beef firms' deal

October 21, 2008|The Associated Press

Regulators filed a lawsuit Monday to block the world's largest beef packer from buying the nation's fourth-largest operation, saying such a deal could push up beef prices for consumers and drive down prices paid to ranchers and feedlots.

The Department of Justice and attorneys general for 13 states filed the suit against Brazilian beef producer JBS and National Beef Packing Co. of Kansas City, Mo.

In March, JBS said it would acquire National Beef in a $560-million stock-and-cash deal, which would make it the nation's largest beef processor. It also announced a deal to buy Smithfield Beef Group Inc., the nation's fifth-largest beef producer, for $565 million. The Department of Justice said it was not challenging that deal, only the deal with the larger player, which would combine two of the top four U.S. beef packers.

Grocers, food service companies and ultimately consumers probably would have to pay higher prices for beef if JBS' buyout of National Beef were to go through, according to filings in U.S. District Court in the Northern District of Illinois.

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