Justice Department Requires Divestiture to Resolve Antitrust Concerns in Symrise's Acquisition of IDF and ADF
Symrise Must Divest its Banks County, Georgia, Plant to Preserve Competition in the Manufacture and Sale of Chicken-Based Food Ingredients
The Department of Justice announced today that it will require Symrise AG to divest its chicken-based food ingredient manufacturing facility in Banks County, Georgia, in order to proceed with its proposed $900 million acquisition of International Dehydrated Foods LLC (IDF) and American Dehydrated Foods LLC (ADF) from IDF Holdco Inc. and ADF Holdco Inc.
The Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to block the proposed merger. At the same time, the Division filed a proposed settlement that, if approved by the court, would resolve the Department’s competitive concerns.
“This structural solution ensures that American consumers will continue to benefit from vigorous competition for a critical input used in everyday consumer staples like chicken soup, chicken broth and pet food,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “Today’s settlement fully preserves competition in the sale of chicken-based food ingredients.”
According to the complaint, without the divestiture, the combined company would control over 75 percent of the domestic market for the manufacture and sale of chicken-based food ingredients. These ingredients are derived from chicken and sold to food manufacturers for use in a variety of human and pet food products. Without the required divestiture, the combined company likely would have been able to increase prices, reduce service and quality, and diminish innovation in the market for chicken-based food ingredients.
The divestiture required under the settlement would, if approved by the court, require Symrise to sell its brand-new facility in Banks County, Georgia, to Kerry Inc. or an alternate acquirer approved by the United States. Kerry is a global manufacturer of ingredients and recipe solutions for the food and beverage industry. This divestiture ensures that the buyer of the Banks County facility will be well positioned to compete vigorously with the merged company in the manufacture and sale of chicken-based food ingredients in the United States.
Symrise AG is a publicly listed company headquartered in Holzminden, Germany, with diversified operations in multiple lines of business. It manufactures and sells chicken-based food ingredients through its Diana Food and Diana Pet Food subsidiaries. In 2018, Symrise reported total revenue of approximately $3.5 billion.
IDF and ADF are privately held companies headquartered in Springfield, Missouri, whose operations include two chicken-based food ingredient plants in Alabama and Missouri. The companies’ combined 2018 revenue for chicken-based food ingredients used in human and pet food manufacturing was approximately $177 million.
As required by the Tunney Act, the proposed settlement and the Department’s competitive impact statement will be published in the Federal Register. Any person may submit written comments by mail concerning the proposed settlement within 60 days of its publication to Robert Lepore, Acting Chief, Transportation, Energy and Agriculture Section, Antitrust Division, U.S. Department of Justice, 450 Fifth St. N.W., Suite 8000, Washington DC 20530, telephone: 202-307-6349. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.