U.S. Sugar Completes Deal Amid Legal Fight
TALLAHASSEE — U.S. Sugar Corp. has completed a $315 million purchase of another large player in the sugar industry as the federal government continues to fight the merger on antitrust grounds.
Attorneys for Clewiston-based U.S. Sugar said in a court filing Tuesday that it had completed the acquisition of the assets of Imperial Sugar Co. The filing came after a federal judge on Sept. 23 rejected an attempt by the U.S. Department of Justice to block the merger.
The Justice Department appealed the decision to the 3rd U.S. Circuit Court of Appeals, which has tentatively scheduled arguments on Jan. 19. The Philadelphia-based appellate court on Sept. 30 denied a Justice Department request for an injunction that could have at least temporarily put the deal on hold.
U.S. Sugar, long a major player in Florida government and politics, announced in March 2021 that it had reached an agreement to purchase Imperial Sugar from Louis Dreyfus Co. A key to the purchase — and the antitrust battle — is an Imperial Sugar refinery at Port Wentworth, Ga.
In a brief filed last week, U.S. Sugar described the Georgia facility as relying on old equipment and operating below capacity. U.S. Sugar indicated it plans to upgrade the facility and use it to refine more of the sugarcane that U.S. Sugar grows.
“Imperial describes itself as ‘structurally uncompetitive;’ it is principally a residual or back-up supplier; and its customer base has shrunk steadily in recent years,” the Nov. 21 brief said.
Senators Elizabeth Warren and Cory Booker want to know how a USDA sugar analyst helped pave the way for a merger the Biden administration was trying to stop https://t.co/ToFqaysuzn
— TIME (@TIME) November 15, 2022
In a big case to block U.S. Sugar-Imperial Sugar's megamerger, a @USDA economist actually testified in FAVOR of the sugar monopolists.
— American Economic Liberties Project (@econliberties) November 9, 2022
A federal judge has ruled that U.S. Sugar can proceed with its $315 million acquisition of rival Imperial Sugar, rejecting a Justice Department antitrust lawsuit. https://t.co/33WDEbDe7g
— Axios (@axios) September 26, 2022
Judge rules in favor of U.S. Sugar purchase of Imperial, rejects antitrust concerns https://t.co/cKQ43imyA2
— Carla D. Martin (@carladmartin) October 13, 2022
But the Justice Department alleges that the deal would hurt competition, particularly in the Southeast United States. The legal challenge is based on antitrust law known as the Clayton Act.
“The merger at issue in this case involves a leading Florida-based sugar refiner’s acquisition of its major rival’s Georgia-based refinery,” Justice Department attorneys wrote in a Nov. 1 brief. “As the government has established, the merger threatens precisely the harm that (a section of the Clayton Act) proscribes: substantially lessening competition in the market for the production and sale of refined sugar.”
In its Nov. 21 brief, however, U.S. Sugar said that during a district-court trial the Justice Department “presented overly narrow and inconsistent product and geographic markets in an attempt to distort the competitive impact of United States Sugar Corporation’s acquisition of Imperial Sugar Company.” It urged the appellate court to uphold the Sept. 23 ruling by Delaware-based U.S. District Judge Maryellen Noreika.
“The record in this case is long and detailed, involving fact-intensive questions about the commercial realities of the U.S. sugar industry,” the U.S. Sugar brief said. “The district court’s decision turned on extensive findings of fact and credibility determinations. The district court had the opportunity to study the record for months, and to observe and question the witnesses at a four-day trial. The government lost that trial on the facts.”
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