Antitrust Law Daily Wrap Up, ANTITRUST—D.D.C.: U.S. consent decree allowing flour milling JV approved, (Oct 6, 2014)

By Jeffrey May, J.D.

Despite vocal opposition from the American Antitrust Institute to a joint venture (JV) between ConAgra Foods, Cargill, and CHS to combine their North American flour milling businesses, the federal district court in Washington, D.C. has approved a consent decree resolving Department of Justice Antitrust Division concerns over the deal (U.S. v. ConAgra Foods, Inc., October 2, 2014, Jackson, J.).

In May, the Justice Department filed a complaint to block the proposed Ardent Mills joint venture that was to combine the flour milling assets of ConAgra Mills, a subsidiary of ConAgra Foods, and Horizon Milling—a joint venture between Cargill and CHS. At the same time, a proposed consent decree was filed with the court that was intended to resolve the government’s competitive concerns.

In its complaint, the government alleged that the formation of Ardent Mills likely would lessen competition in violation of Section 7 of the Clayton Act and Section 1 of the Sherman Act. Specifically, it would substantially lessen competition for the provision of hard wheat flour (for crusty, chewy baked goods, such as bread, bagels, or pizza dough) to customers in Northern California, Southern California, Northern Texas, and the Upper Midwest, and soft wheat flour (for flakier baked goods, such as cakes, cookies, crackers, or pastries) to customers in Southern California and Northern Texas.

Under the terms of the final judgment, the defendants were required to divest four flour mills located in Oakland, California; Los Angeles, California; Saginaw, Texas; and New Prague, Minnesota. The settlement also prohibited Cargill, CHS, and ConAgra from disclosing to Ardent Mills certain non-public information relating to wheat sales to, and wheat use by, Cargill, CHS, and ConAgra wheat customers.

American Antitrust Institute concerns. The American Antitrust Institute (AAI) and Food & Water Watch (F&WW) in February sent a letter to Bill Baer, Assistant Attorney General in charge of the Antitrust Division, urging the Justice Department to block the deal. AAI and F&WW contended that the divestiture of four mills was an inadequate remedy. During the public comment period for the proposed final judgment, the Justice Department did not receive any public comments on the settlement.

The case is No. 1:14-cv-00823.

Attorneys: Mark. J. Niefer for Department of Justice Antitrust Division. Kathryn M. Fenton and Kenneth W. Field (Jones Day) for ConAgra Foods, Inc. Scott A. Stempel and Harry T. Robins (Morgan Lewis & Bockius, LLP) for Cargill, Inc., Horizon Milling, and CHS Inc.

Companies: ConAgra Foods, Inc.; Cargill, Inc.; CHS Inc.

Cases: AcquisitionsMergers Antitrust AntitrustDivisionNews