United States of America v. ConAgra Foods, Inc, et al.; Proposed Final Judgment and Competitive Impact Statement, 30881-30897 [2014-12397]

Agencies

• Antitrust Division
• Department of Justice

[Federal Register Volume 79, Number 103 (Thursday, May 29, 2014)]
[Notices]
[Pages 30881-30897]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-12397]


-----------------------------------------------------------------------

DEPARTMENT OF JUSTICE

Antitrust Division


United States of America v. ConAgra Foods, Inc, et al.; Proposed 
Final Judgment and Competitive Impact Statement

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment, 
Hold Separate Stipulation and Order, and Competitive Impact Statement 
have been filed with the United States District Court for the District 
of Columbia in United States of America v. ConAgra Foods, Inc., et al., 
Civil Action No. 1:14-cv-823. On May 20, 2014, the United States filed 
a Complaint alleging that the combination of the wheat flour milling 
assets of ConAgra Foods, Inc. and Horizon Milling, LLC (a joint venture 
between Cargill, Inc. and CHS, Inc.) to form a joint venture to be 
known as Ardent Mills would violate Section 7 of the Clayton Act, 15 
U.S.C. 18, and Section 1 of the Sherman Act, 15 U.S.C. 1. The proposed 
Final Judgment, filed the same time as the Complaint, requires Ardent

[[Page 30882]]

Mills to divest flour mills located in Los Angeles, California; New 
Prague, Minnesota; Oakland, California; and Saginaw, Texas, along with 
certain tangible and intangible assets.
    Copies of the Complaint, proposed Final Judgment and Competitive 
Impact Statement are available for inspection at the Department of 
Justice, Antitrust Division, Antitrust Documents Group, 450 Fifth 
Street NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-2481), 
on the Department of Justice's Web site at https://www.usdoj.gov/atr, 
and at the Office of the Clerk of the United States District Court for 
the District of Columbia. Copies of these materials may be obtained 
from the Antitrust Division upon request and payment of the copying fee 
set by Department of Justice regulations.
    Public comment is invited within 60 days of the date of this 
notice. Such comments, including the name of the submitter, and 
responses thereto, will be posted on the U.S. Department of Justice, 
Antitrust Division's internet Web site, filed with the Court and, under 
certain circumstances, published in the Federal Register. Comments 
should be directed to Maribeth Petrizzi, Chief, Litigation II Section, 
Antitrust Division, Department of Justice, 450 Fifth Street NW., Suite 
8700, Washington, DC 20530.

Patricia A. Brink,
Director of Civil Enforcement.

FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA, United States Department of Justice, 
Antitrust Division, 450 Fifth Street N.W., Suite 8700, Washington, 
D.C. 20530, Plaintiff, v. CONAGRA FOODS, INC., One ConAgra Drive, 
Omaha, Nebraska 68102, HORIZON MILLING, LLC, 15407 McGinty Road 
West, Wayzata, Minnesota 55391, CARGILL, INCORPORATED, 15407 McGinty 
Road West, Wayzata, Minnesota 55391, and CHS INC., 5500 Cenex Drive, 
Inver Grove Heights, Minnesota 55077, Defendants.
Case No.: 1:14-cv-00823
Judge: Hon. Ketanji Brown Jackson
Filed: 05/20/2014

COMPLAINT

    The United States of America (``United States''), acting under the 
direction of the Attorney General of the United States, brings this 
civil antitrust action against Defendants ConAgra Foods, Inc. 
(``ConAgra''), Horizon Milling, LLC (``Horizon''), Cargill, 
Incorporated (``Cargill''), and CHS Inc. (``CHS'') to enjoin the 
formation of a flour milling joint venture to be known as Ardent Mills 
(``Ardent Mills'' or ``the joint venture'').
    Ardent Mills would be formed by combining the flour milling assets 
of Horizon (a joint venture between Cargill and CHS) and ConAgra Mills 
(a subsidiary of ConAgra). Horizon and ConAgra Mills are two of the 
three largest flour millers in the United States, as measured by 
capacity. Horizon and ConAgra Mills are significant competitors in the 
sale of hard and soft wheat flour in Southern California and Northern 
Texas; they also are significant competitors in the sale of hard wheat 
flour in Northern California and the Upper Midwest. The formation of 
Ardent Mills likely would lessen competition in each of these markets 
in violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18, and 
Section 1 of the Sherman Act, 15 U.S.C. Sec.  1.

I. JURISDICTION, VENUE, AND COMMERCE

    1. The United States brings this action under Section 15 of the 
Clayton Act, 15 U.S.C. Sec.  25, and Section 4 of the Sherman Act, 15 
U.S.C. Sec.  4, to prevent and restrain Defendants from violating 
Section 7 of the Clayton Act, 15 U.S.C. Sec.  18, and Section 1 of the 
Sherman Act, 15 U.S.C. Sec.  1.
    2. Defendants produce and sell flour in the flow of interstate 
commerce. Defendants' activities in the production and sale of flour 
substantially affect interstate commerce. This Court has subject matter 
jurisdiction over this action pursuant to Section 15 of the Clayton 
Act, 15 U.S.C. Sec.  25; Section 4 of the Sherman Act, 15 U.S.C. Sec.  
4; and 28 U.S.C. Sec. Sec.  1331, 1337(a), and 1345.
    3. Defendants have consented to venue and personal jurisdiction in 
this judicial district.

II. THE DEFENDANTS AND THE TRANSACTION

    4. ConAgra is incorporated in Delaware and has its headquarters in 
Omaha, Nebraska. ConAgra is one of the largest food companies in the 
United States. Its ConAgra Mills subsidiary makes several types of 
flour, including hard wheat flour and soft wheat flour. ConAgra Mills 
operates twenty-one wheat flour mills in the United States. It is one 
of the three largest wheat flour millers in the country, with a total 
daily wheat flour capacity of approximately 225,000 hundred weight 
(``cwt''). In 2012, ConAgra reported revenues of $13.3 billion; ConAgra 
Mills reported revenues of $1.8 billion.
    5. Horizon is a joint venture formed in 2002 by Cargill and CHS 
that is headquartered in Wayzata, Minnesota. Cargill owns 76 percent of 
Horizon and CHS owns 24 percent of Horizon. Horizon makes several types 
of flour, including hard wheat flour and soft wheat flour. It is one of 
the three largest wheat flour millers in the United States, controlling 
twenty wheat flour mills with a total daily wheat flour capacity of 
approximately 270,000 cwt. In 2012, Horizon reported revenues of 
approximately $2.5 billion.
    6. Cargill is a privately held company that is incorporated in 
Delaware and has its headquarters in Wayzata, Minnesota. Cargill 
produces agricultural products and food ingredients; it also markets 
wheat to flour mills. All of Cargill's flour mills were contributed to 
the Horizon joint venture, which presently includes fifteen of 
Cargill's former wheat flour mills. In 2012, Cargill reported revenues 
of $133.8 billion.
    7. CHS is incorporated in Minnesota and has its headquarters in 
Inver Grove Heights, Minnesota. It sells, among other things, grains 
and grain marketing services, animal feed, foods, and food ingredients; 
it also markets wheat to flour mills. CHS owns five wheat flour mills 
in the United States, all of which are leased to the Horizon joint 
venture. In 2012, CHS reported revenues of $40.1 billion.
    8. Pursuant to a March 4, 2013 Master Agreement, Ardent Mills would 
combine the flour milling operations of ConAgra Mills and Horizon. The 
joint venture would be 44 percent owned by ConAgra, 44 percent owned by 
Cargill, and 12 percent owned by CHS. Ardent Mills would own forty-one 
wheat flour mills in the United States. It would have annual sales of 
more than $3 billion, and assets worth more than $2.5 billion.

III. BACKGROUND

    9. Wheat flour is an important ingredient in many baked goods. The 
two primary types of wheat flour--hard wheat flour and soft wheat 
flour--are distinguished by their gluten content. ``Hard'' wheat flour 
has a high gluten content, which makes it well suited for baking bread, 
rolls, bagels, pizza dough, and similar baked goods. Gluten is a 
protein that helps trap gasses during the leavening process, permitting 
baked goods to rise, and giving them a tougher, chewier texture. 
``Soft'' wheat flour has a low gluten content, which makes it well 
suited for baked goods that are lighter and flakier than bread and 
rolls, such as cakes, cookies, and crackers, which have a tender, 
crumbly texture.
    10. Wheat flour is produced by grinding wheat into a fine powder. 
The process starts by feeding wheat kernels into a flour mill's 
``breaker rollers,'' which crack open the wheat kernels, separating the 
exterior hull from the

[[Page 30883]]

interior endosperm of each kernel. The separated exterior hulls are 
known as wheat middlings, or ``midds,'' and typically are sold for use 
in the manufacture of animal feed. The interior endosperm is further 
ground between rollers to produce flour. Although some flour mills, 
known as ``swing'' mills, are set up to produce hard and soft wheat 
flour, most flour mills are designed to produce only one or the other. 
Hard and soft wheat flour generally cannot be produced on the same 
equipment without a substantial loss of efficiency, which increases the 
cost of producing flour.
    11. Finished wheat flour is sold to industrial bakers, food service 
companies, distributors, and retail sellers. Larger flour customers 
typically purchase flour pursuant to a formal request for proposal or a 
less formal bidding-type solicitation. For such purchases, large flour 
customers often specify the characteristics of the flour they desire to 
buy (including protein level, an indicator of gluten content), and they 
seek to negotiate the lowest price possible for the type of flour they 
desire. Smaller customers typically purchase standard types of flour at 
a price based on a miller's daily or weekly price sheet. Smaller 
customers often compare the delivered price offered by rival millers to 
determine the best available flour price, and they often can negotiate 
a discount off of list prices by playing millers against one another.
    12. The price of delivered wheat flour has five key components: (i) 
the price of wheat, which is usually determined by the price on an 
organized wheat market; (ii) the ``basis,'' which accounts for the 
difference between the organized wheat market price and the local price 
for a miller; (iii) the ``millfeed credit,'' which is based on the 
price at which a miller can sell wheat middlings; (iv) transportation 
costs, i.e., the cost of delivering flour from the mill to the 
customer; and (v) the ``block,'' which covers the cost of converting 
wheat into flour.
    13. The first four components largely are determined by a mill's 
location or market forces that are beyond a miller's control, and 
account for the overwhelming majority of the price of delivered flour. 
Although competing millers seek to minimize each of these components to 
keep the delivered price of flour low, the block--which is a relatively 
small portion of the total delivered price of flour--is the primary 
component on which millers compete.
    14. Although transportation costs also are a relatively small 
portion of the cost of delivered flour, they often determine whether a 
flour miller can supply a customer cost effectively. Customers 
frequently find that the most cost competitive flour millers are those 
with nearby mills, whose flour transportation costs are low relative to 
those of more distant flour mills. Although flour can travel long 
distances by rail, the added cost of doing so may prevent distant mills 
from making substantial sales to local customers. Thus, competition for 
flour sales to a customer takes place largely among millers located 
within approximately 150 to 200 miles of a customer. Within that area, 
competition among millers largely takes place over the size of the 
block offered to the customer, all else equal.

IV. RELEVANT MARKETS

A. Relevant Product Markets

    15. Hard wheat flour is a relevant product market and a line of 
commerce under Section 7 of the Clayton Act, and Section 1 of the 
Sherman Act. Hard wheat flour has specific applications for which other 
types of flour cannot be used. A baker of crusty, chewy baked goods, 
such as bread, bagels, or pizza dough, cannot use soft wheat flour 
because the finished product will not ``rise'' or have the texture that 
consumers expect. As a result, a flour customer who requires hard wheat 
flour would not substitute other products in response to a small but 
significant and nontransitory increase in the price of hard wheat 
flour.
    16. Soft wheat flour is a relevant product market and line of 
commerce under Section 7 of the Clayton Act, and Section 1 of the 
Sherman Act. Soft wheat flour has specific applications for which other 
types of flour cannot be used. A baker of lighter, flakier baked goods, 
such as cakes, cookies, crackers, or pastries, cannot use hard wheat 
flour in place of soft wheat flour because the finished product will 
not remain flat--as is desirable for crackers or pastries--or have the 
texture that consumers expect. As a result, a flour customer who 
requires soft wheat flour would not substitute other products in 
response to a small but significant and nontransitory increase in the 
price of soft wheat flour.

B. Relevant Geographic Markets

    17. Flour millers can price differently to customers in different 
locations. Hard and soft wheat flour sales typically are negotiated by 
a miller and an individual customer. Flour millers take into account 
rivals' mills that can economically supply a customer when determining 
the price at which to sell to that customer. Thus, a miller will charge 
a higher price to a customer in an area with few supply options 
relative to a customer in an area with many supply options.
    18. Flour customers are unlikely to arbitrage in response to such 
differential pricing. The ability of customers to arbitrage by securing 
flour from customers in other areas is limited by transportation costs, 
which limit the distance that flour can economically be shipped. 
Moreover, arbitrage by securing flour from customers in other areas 
entails increased food safety and quality risks. As a result, most 
customers would not find it desirable or cost effective to buy flour 
from customers in other areas.
    19. Because flour millers can price differentially and customers 
are unlikely to arbitrage, flour millers can price discriminate. In the 
presence of price discrimination, relevant geographic markets may be 
defined by reference to the location of customers. In particular, the 
relevant geographic markets for hard and soft wheat flour are those 
areas of the country encompassing the locations of customers who could 
be similarly targeted for a price increase.
    20. A hypothetical monopolist flour miller could impose on 
customers a small but significant nontransitory price increase in each 
of the following areas (which encompass certain metropolitan 
statistical areas): Northern California (encompassing Santa Rosa-
Petaluma, Napa, Sacramento-Arden-Arcade-Roseville, Stockton, Vallejo-
Fairfield, San Francisco-Oakland-Fremont, Santa Cruz-Watsonville, San 
Jose-Sunnyvale-Santa Clara, Merced, and Modesto), Southern California 
(encompassing Los Angeles-Long Beach-Santa Ana, Riverside-San 
Bernardino-Ontario, and San Diego-Carlsbad-San Marcos), Northern Texas 
(encompassing Dallas-Fort Worth-Arlington), and the Upper Midwest 
(encompassing Minneapolis-St. Paul-Bloomington, Eau Claire, Madison, La 
Crosse, and Rochester). Therefore, each area is a relevant geographic 
market under Section 7 of the Clayton Act, and Section 1 of the Sherman 
Act.

V. MARKET SHARES AND CONCENTRATION

    21. Ardent Mills would own a substantial share of flour milling 
capacity serving each relevant market. Because transportation costs 
limit the ability of distant millers to compete with local millers for 
customers, competition for flour sales largely takes place among 
millers with milling capacity located within 150 to 200 miles of a 
customer. Thus, milling capacity within 200 miles of key cities within 
each geographic area is a useful basis on

[[Page 30884]]

which to estimate market shares and concentration, and it approximates 
sales shares in each geographic market. Each 200-mile area around a 
city encompasses those flour millers most likely to compete for sales 
in each geographic market, and shares based on capacity within 200 
miles of each city are indicative of the likely competitive effects for 
customers in the broader relevant markets.
    22. In Northern California, Ardent Mills would own approximately 70 
percent of hard wheat flour milling capacity within 200 miles of San 
Francisco. In Southern California, it would own more than 40 percent of 
hard wheat flour milling capacity, and approximately 70 percent of soft 
wheat flour milling capacity, within 200 miles of Los Angeles. In 
Northern Texas, it would own more than 75 percent of hard wheat flour 
milling capacity, and 100 percent of the soft wheat flour milling 
capacity, within 200 miles of Dallas/Ft. Worth. In the Upper Midwest, 
it would own more than 60 percent of hard wheat flour milling capacity 
within 200 miles of Minneapolis. Given that transportation costs limit 
the ability of more distant mills to compete in these areas, Ardent 
Mills's large capacity shares would result in Ardent Mills having a 
large share of sales in these areas.
    23. Based on capacity within 200 miles of key cities in each 
market, formation of Ardent Mills would increase the Herfindahl-
Hirschman Index (``HHI''),\1\ a standard measure of market 
concentration, by more than 200 points to more than 2,500 points in the 
relevant markets. For San Francisco, formation of the joint venture 
would increase the HHI for hard wheat flour to more than 5,000. For Los 
Angeles, the joint venture would increase the HHI for hard wheat flour 
to more than 2,500; and the HHI for soft wheat flour to more than 
5,500. For Dallas/Ft. Worth, the HHI for the hard wheat flour would 
increase to more than 6,000; and the HHI for soft wheat flour would 
increase to 10,000. For Minneapolis, the HHI for hard wheat flour would 
increase to more than 4,500. As a result, the joint venture should be 
presumed likely to enhance market power in each of the relevant 
markets.
---------------------------------------------------------------------------

    \1\ See U.S. Dep't of Justice and Federal Trade Commission, 
Horizontal Merger Guidelines Sec.  5.3 (2010), available at https://www.justice.gov/atr/public/guidelines/hmg-2010.html. The HHI is 
calculated by squaring the market share of each firm competing in 
the market, then summing the resulting numbers. The HHI takes into 
account the relative size distribution of the firms in a market; it 
increases both as the number of firms in the market decreases and as 
the disparity in size between those firms increases. The HHI 
approaches zero in markets with a large number of participants of 
relatively equal size and reaches a maximum of 10,000 points in 
markets controlled by a single firm.
---------------------------------------------------------------------------

VI. ANTICOMPETITIVE EFFECTS OF THE JOINT VENTURE

A. Formation of Ardent Mills Would Eliminate Head-to-Head Competition 
Between Horizon and ConAgra

    24. The formation of Ardent Mills would eliminate head-to-head 
competition between ConAgra Mills and Horizon in the relevant markets. 
ConAgra Mills and Horizon routinely compete by offering lower prices to 
their customers, and customers have secured lower prices by playing 
ConAgra Mills and Horizon against one another. The formation of Ardent 
Mills would eliminate that competition, resulting in higher hard wheat 
flour prices for customers in Northern California, Southern California, 
Northern Texas, and the Upper Midwest, and higher soft wheat flour 
prices for customers in Southern California and Northern Texas.
    25. Horizon and ConAgra Mills operate mills that are close to one 
another in the relevant geographic markets, and that are among those 
closest to many customers in those markets. Because their mills are the 
closest mills to many customers, Horizon's and ConAgra's delivered 
flour costs tend to be lower than those of their rivals' more distant 
mills. Moreover, because their mills are located close to one another, 
Horizon's and ConAgra's flour transportation costs tend to be similar. 
As a result of the proximity of their mills to one another--and to one 
another's customers--Horizon and ConAgra frequently are among the 
lowest-cost flour suppliers for customers in the relevant areas, and 
they compete aggressively against one another to make sales in those 
areas. That competition would be lost with the formation of Ardent 
Mills.

B. Formation of Ardent Mills Would Increase the Likelihood of 
Anticompetitive Capacity Closures

    26. Relative to stand-alone Horizon and ConAgra Mills, the joint 
venture would increase the incentive and ability of Ardent Mills to 
close hard and soft wheat flour milling capacity serving the relevant 
markets. With a larger base of mills to benefit from increased flour 
prices, the joint venture would have an increased incentive to shut 
down capacity. The joint venture also would have mills with a wider 
array of operating costs from which to choose capacity to shut down, 
increasing the ability of the joint venture to profitably shut down 
capacity or entire mills. By creating a larger portfolio of flour mills 
with differing costs, formation of the joint venture would make it more 
likely that Ardent Mills would find it profitable to close a higher-
cost mill to raise hard or soft wheat flour prices. Thus, the joint 
venture would increase the likelihood of capacity closure, which would 
tighten supply relative to demand, inducing Ardent Mills and rival 
millers to compete less aggressively for flour sales, ultimately 
increasing flour prices to customers in the relevant geographic 
markets.

C. Formation of Ardent Mills Would Increase the Likelihood of 
Anticompetitive Coordination

    27. The formation of Ardent Mills would increase the likelihood of 
anticompetitive coordination among flour millers. Several features of 
hard and soft wheat flour markets render them susceptible to 
anticompetitive coordination. First, the markets are transparent, which 
gives millers insight into their rivals' costs, prices, output, and 
capacity utilization levels. Second, hard wheat flour and soft wheat 
flour are relatively homogeneous products that are purchased 
frequently. Third, the demand for hard and soft wheat flour is 
relatively inelastic. Finally, larger flour millers compete against one 
another to supply hard and soft flour in multiple geographic markets.
    28. The relevant markets already are highly concentrated, and the 
formation of the joint venture would significantly increase that 
concentration by reducing the number of substantial millers in each of 
the relevant markets. As a result, the formation of Ardent Mills would 
allow it and its few remaining rivals to more easily identify and 
account for the competitive strategies of one another, making it easier 
for them to coordinate on capacity, price, or other competitive 
strategies in the relevant markets, which already are susceptible to 
coordination. This, in turn, will make coordination more likely and 
more durable, increasing the likelihood that hard and soft wheat flour 
prices would increase in the relevant markets.
    29. The formation of Ardent Mills also would permit information 
exchanges between CHS, Cargill, and the joint venture that would 
facilitate coordination in the relevant markets. CHS and Cargill 
propose entering into side agreements to supply Ardent Mills with 
wheat. These agreements include terms that, in principle, would permit 
CHS, and Cargill to provide Ardent Mills with detailed information 
about rival millers' wheat purchases, giving the joint venture greater 
insight into its

[[Page 30885]]

rivals' costs. As a result, the side agreements would make it easier 
for Ardent Mills to understand the competitive strategies of its 
rivals, which would make coordination more likely and durable, 
increasing the likelihood that hard and soft wheat flour prices would 
increase in the relevant markets.

VII. ENTRY

    30. Entry would not be likely, timely, or sufficient to offset the 
anticompetitive effects of the formation of Ardent Mills. Flour is a 
mature industry with stable demand and margins, which means that the 
incentive to enter the relevant markets with a new mill, or with 
substantial new capacity at an existing mill, is small. It also is 
unlikely that entry by more distant mills delivering flour by rail will 
be timely, likely, or sufficient due to rail delivery's additional cost 
and inconvenience, which renders it an unacceptable option for many 
customers.

VIII. VIOLATIONS ALLEGED

A. Violation of Section 7 of the Clayton Act

    31. The proposed joint venture likely would substantially lessen 
competition in the relevant markets, in violation of Section 7 of the 
Clayton Act, 15 U.S.C. Sec.  18.
    32. Unless enjoined, the joint venture likely would have the 
following anticompetitive effects, among others:

    a. competition between ConAgra and Horizon in the relevant markets 
would be eliminated;
    b. competition in the relevant markets likely would be 
substantially lessened;
    c. reductions in milling capacity would be more likely;
    d. coordination in the relevant markets would be easier and more 
likely; and, as a result,
    e. hard wheat flour prices would increase for customers in Northern 
California, Southern California, Northern Texas, and the Upper Midwest; 
and soft wheat flour prices would increase for customers in Southern 
California and Northern Texas.

B. Violation of Section 1 of the Sherman Act

    33. ConAgra and Horizon's agreement to combine their flour-milling 
assets and operations through the Ardent Mills joint venture, to 
eliminate competition between them, and not to compete against each 
other unreasonably restrains trade, and likely would continue to 
unreasonably restrain trade, in the relevant markets in violation of 
Section 1 of the Sherman Act, 15 U.S.C. Sec.  1.

IX. REQUESTED RELIEF

    34. The United States requests that this Court:

    a. adjudge and decree that the Ardent Mills joint venture would be 
unlawful and violate Section 7 of the Clayton Act, 15 U.S.C. Sec.  18;
    b. adjudge and decree that the Ardent Mills joint venture would be 
unlawful and violate Section 1 of the Sherman Act, 15 U.S.C. Sec.  1;
    c. preliminarily and permanently enjoin and restrain Defendants and 
all persons acting on their behalf from effectuating the Ardent Mills 
joint venture, or from entering into or carrying out any other 
contract, agreement, plan, or understanding, the effect of which would 
be to create such a joint venture;
    d. award the United States its costs for this action; and
    e. award the United States such other and further relief as the 
Court deems just and proper.
Dated: May 20, 2014

    Respectfully submitted,
FOR PLAINTIFF UNITED STATES OF AMERICA:
/s/--------------------------------------------------------------------
-----------------------------------------------------------------------
RENATA B. HESSE

Acting Assistant Attorney General.

/s/--------------------------------------------------------------------
DAVID I. GELFAND

Deputy Assistant Attorney General.

/s/--------------------------------------------------------------------
PATRICIA A. BRINK

Director of Civil Enforcement.

/s/--------------------------------------------------------------------
MARIBETH PETRIZZI

(D.C. BAR # 435204), Chief, Litigation II Section.

/s/--------------------------------------------------------------------
DOROTHY B. FOUNTAIN

(D.C. BAR # 439469), Assistant Chief, Litigation II Section.

/s/--------------------------------------------------------------------
MARK J. NIEFER*

(D.C. BAR # 470370), Attorney, United States Department of Justice, 
Antitrust Division, 450 Fifth Street NW., Suite 8000, Washington, DC 
20530, Telephone: (202) 307-6381, Facsimile: (202) 616-2441, E-mail: 
mark.niefer@usdoj.gov.

SUSAN L. EDELHEIT

(D.C. BAR # 250720)

CHRISTINE A. HILL
ANGELA L. HUGHES
(D.C. BAR # 303420)

MICHELLE A. LIVINGSTON
(D.C. BAR # 461268)

JOHN M. NEWMAN
JILL A. PTACEK
JAMES A. RYAN
CHINITA M. SINKLER
Attorneys for the United States.
* Attorney of Record.

UNITED STATES OF AMERICA

FOR THE DISTRICT OF COLUMBIA

    UNITED STATES OF AMERICA Plaintiff, v.CONAGRA FOODS, INC., 
HORIZON MILLING, LLC, CARGILL, INCORPORATED, and CHS INC., 
Defendants.
Case No.: 1:14-cv-00823
Judge: Hon. Ketanji Brown Jackson
Dated: May 20, 2014

COMPETITIVE IMPACT STATEMENT

    Plaintiff United States of America (``United States''), pursuant to 
Section 2(b) of the Antitrust Procedures and Penalties Act (``APPA'' or 
``Tunney Act''), 15 U.S.C. Sec.  16(b)-(h), files this Competitive 
Impact Statement relating to the Proposed Final Judgment submitted for 
entry in this civil antitrust proceeding.

I. NATURE AND PURPOSE OF THE PROCEEDING

    Defendants ConAgra Foods, Inc. (``ConAgra''), Cargill, Incorporated 
(``Cargill''), and CHS Inc. (``CHS'') entered into a Master Agreement, 
dated March 4, 2013, which would combine the wheat flour milling assets 
of ConAgra and defendant Horizon Milling, LLC (``Horizon'') (a joint 
venture between Cargill and CHS) to form a joint venture to be known as 
Ardent Mills (``Ardent Mills'' or ``the joint venture'').
    The United States filed a civil antitrust Complaint on May 20, 
2014, seeking to enjoin the joint venture. The Complaint alleges that 
the likely effect of the formation of Ardent Mills would be to 
substantially lessen competition for the provision of hard wheat flour 
to customers in Northern California, Southern California, Northern 
Texas, and the Upper Midwest, and soft wheat flour to customers in 
Southern California and the Northern Texas, in violation of Section 7 
of the Clayton Act, 15 U.S.C. Sec.  18, and Section 1 of the Sherman 
Act, 15 U.S.C. Sec.  1.
    At the same time the Complaint was filed, the United States also 
filed a Proposed Final Judgment, which is designed to eliminate the 
anticompetitive effects of the joint venture. Under the Proposed Final 
Judgment, which is explained more fully below, Defendants are required 
to

[[Page 30886]]

divest four flour mills located in Oakland, California; Los Angeles, 
California; Saginaw, Texas; and New Prague, Minnesota. The Proposed 
Final Judgment also prohibits 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.
    In a Hold Separate Stipulation and Order filed at the same time as 
the Complaint and Proposed Final Judgment, the United States and 
Defendants have stipulated that the Proposed Final Judgment may be 
entered after compliance with the APPA.\2\ Entry of the Proposed Final 
Judgment would terminate this action, except that the Court would 
retain jurisdiction to construe, modify, or enforce the provisions of 
the Proposed Final Judgment and to punish violations thereof.
---------------------------------------------------------------------------

    \2\ The Hold Separate Stipulation and Order requires Defendants 
to hold separate their entire wheat flour milling businesses until 
after the divestitures required by the Proposed Final Judgment have 
occurred.
---------------------------------------------------------------------------

II. DESCRIPTION OF THE EVENTS GIVING RISE TO THE ALLEGED VIOLATION

A. Defendants and the Proposed Joint Venture

    ConAgra is a Delaware corporation headquartered in Omaha, Nebraska. 
It is one of the largest food companies in the United States. Its 
ConAgra Mills subsidiary makes multiple types of flour, including hard 
wheat flour and soft wheat flour. ConAgra Mills operates twenty-one 
wheat flour mills in the United States. In terms of capacity, ConAgra 
Mills is one of the three largest wheat flour millers in the United 
States, capable of producing approximately 225,000 hundred weights 
(``cwt''), or about 23 million pounds, of flour per day. In 2012, 
ConAgra reported revenues of $13.3 billion; ConAgra Mills reported 
revenues of $1.8 billion.
    Horizon is a joint venture between Cargill and CHS that is 
headquartered in Wayzata, Minnesota. Cargill owns 76 percent of 
Horizon, and CHS owns the remaining 24 percent of Horizon. Horizon 
makes several types of flour, including hard wheat flour and soft wheat 
flour. In terms of capacity, Horizon is one of the three largest wheat 
flour millers in the country, with twenty mills in the United States, 
capable of producing approximately 270,000 cwt, or about 27 million 
pounds, of flour per day. In 2012, Horizon reported revenues of 
approximately $2.5 billion.
    Cargill is a privately held Delaware corporation headquartered in 
Wayzata, Minnesota. Cargill produces agricultural products and food 
ingredients; it also markets wheat to flour mills. The Horizon joint 
venture includes fifteen mills located in the United States that were 
contributed by Cargill. In 2012, Cargill reported revenues of $133.8 
billion.
    CHS is a Minnesota corporation headquartered in Inver Grove 
Heights, Minnesota. It sells, among other things, grains and grain 
marketing services (including wheat for flour milling), animal feed, 
food, and food ingredients; it also markets wheat to flour mills. The 
Horizon joint venture includes five mills owned by CHS, located in the 
United States, leased by CHS to Horizon. In 2012, CHS reported revenues 
of $40.1 billion.
    Under the March 4, 2013 Master Agreement, ConAgra, Cargill, and CHS 
agreed to combine the wheat flour milling assets of ConAgra Mills and 
Horizon to form Ardent Mills. ConAgra and Cargill each would own a 44 
percent share of the joint venture, and CHS would own the remaining 12 
percent share. Under the Master Agreement, Cargill and CHS also would 
share with Ardent Mills certain information regarding wheat markets. 
The formation of the joint venture likely would substantially lessen 
competition as a result of Defendants' combination of their wheat flour 
milling assets. This proposed joint venture is the subject of the 
Complaint and Proposed Final Judgment filed by the United States on May 
20, 2014.

B. Industry Background

1. Flour Milling and Flour Uses
    Wheat flour is an important ingredient in many baked food products. 
It is made by grinding wheat into a fine powder. The process begins 
with a miller feeding wheat kernels into a flour mill's ``breaker 
rollers,'' which crack open the hard outer shell of the wheat kernel, 
separating the exterior hull from the interior endosperm of each 
kernel. The separated exterior hulls, known as wheat middlings or 
``midds,'' often are sold to manufacturers of animal feed, who 
typically mix the midds with other inputs to manufacture feed. The 
interior endosperm is further ground and sifted to produce wheat flour.
    Hard wheat flour is milled from hard wheat, which has high gluten 
content and a hard endosperm. Soft wheat flour is milled from soft 
wheat, which has low gluten content and a soft endosperm. Soft wheat 
generally does not flow as easily through a mill as hard wheat, which 
necessitates certain design features in a soft wheat flour mill that 
are not required in a hard wheat flour mill. As a result, most flour 
mills are designed to produce hard wheat flour or soft wheat flour. 
Some mills can produce hard wheat flour and soft wheat flour using two 
or more milling units, each of which is dedicated to milling one type 
of flour using the appropriate equipment. Finally, some mills, known as 
``swing'' mills, can produce both types of flour using the same 
equipment. The production of flour in a swing mill, however, usually 
entails a loss of efficiency, which increases the costs of producing 
wheat flour, making a mill less competitive.
    The different gluten content of hard and soft wheat flour limits 
each to certain baked goods applications. Gluten is a type of protein 
found only in wheat that traps gasses produced during leavening and 
baking. The greater the gluten content of flour, the more it will rise 
during baking and the chewier will be the finished product. Hard wheat 
flour's high gluten content makes it well-suited for use in bread, 
rolls, bagels, pizza dough, and similar goods. Soft wheat flour, which 
has lower gluten content, is well-suited for use in lighter, flakier 
products like cakes, cookies, crackers, and pastries. Substituting hard 
wheat flour for soft wheat flour (or vice versa) in a specific 
application would compromise the finished-product characteristics that 
consumers demand. As a result, there is very little substitutability 
between hard and soft wheat flour.
2. Flour Customers and Flour Pricing
    Wheat flour is purchased by four main types of customers: 
industrial bakers, food service companies, flour distributors, and 
retail flour sellers. Larger flour customers typically buy flour 
pursuant to a formal request for proposal or a less formal bidding-type 
process, wherein the customer seeks bids from multiple flour millers. 
These customers frequently specify the characteristics of the flour 
they seek to purchase (including protein content, which is an indicator 
of gluten content). Smaller flour customers often purchase standard 
types of flour at prices that are based on millers' daily or weekly 
price sheets. Whether they buy flour based on a bidding-type process or 
price sheets, customers frequently play millers against one another 
during negotiations, using price quotes from one or more millers as 
leverage to secure lower delivered flour prices from competing millers.

[[Page 30887]]

    The price of delivered flour has five components: (i) the price of 
wheat, usually based on an organized wheat market price (e.g., the 
price of wheat sold on the Minneapolis Grain Exchange, Kansas City 
Board of Trade, or Chicago Mercantile Exchange); (ii) the ``basis,'' 
which is the difference between the price of wheat on an organized 
market and the local market price of wheat for the miller; (iii) the 
``millfeed credit,'' which is based on the price at which the miller 
can sell wheat middlings; (iv) transportation costs, that is, the cost 
of delivering flour from the mill to the customer; and (v) the 
``block'' (sometimes referred to as the ``margin''), which amounts to 
the miller's fee for converting wheat into flour.
    The first four components largely are determined by market forces 
beyond the control of an individual miller, and they account for the 
overwhelming majority of the cost of delivered flour. The block, on the 
other hand, is a relatively small portion of the price of delivered 
flour. Although millers competing with one another to supply a customer 
may seek to minimize the cost of the other components to keep the 
delivered price of flour low, the block is the primary term that 
millers can control, and it is the primary term on which they compete.
3. Transportation Costs and Customers' Supply Options
    Although transportation costs tend to be a relatively small portion 
of the delivered price of flour, they frequently determine whether a 
flour miller can supply a customer cost effectively. Transportation 
costs increase as the distance flour must travel from a mill to a 
customer increases. Therefore, a miller's ability to economically 
supply a customer will depend in part on how far away its mills are 
from the customer's delivery point, which usually is a flour-using 
facility, such as a bakery, food processing plant, or distribution 
center. Mills located close enough to customers to which they can cost 
effectively deliver flour by truck typically are the lowest cost 
competitors for those customers' business. The maximum distance flour 
can economically travel via truck typically is 150 to 200 miles.
    Although some customers are capable of receiving flour delivery 
from distant mills by rail or ``rail-to-truck transfer'' (which entails 
shipping flour by rail, then transferring it to truck for delivery), 
neither is a viable option for many customers. Customers not located on 
a rail spur cannot physically receive direct rail shipments. Even for 
customers with rail access, rail shipments from distant mills are 
typically more expensive, slower, and less reliable than direct truck 
shipments from local mills. Many customers also find that shipments by 
rail-to-truck transfer have all the disadvantages of rail, plus the 
risk that using two modes of transportation (and the need to transfer 
flour from rail to truck) will degrade the quality of the delivered 
flour. Thus, competition for flour sales to a customer takes place 
primarily among millers located no more than 150 to 200 miles from a 
customer.

C. The Relevant Product Markets

    The Complaint alleges that hard wheat flour and soft wheat flour 
are relevant product markets and lines of commerce.
    Due to hard wheat flour's unique characteristics, flour consumers 
use it for specific applications and cannot use other types of flour 
for those applications. For example, a baker that produces crusty, 
chewy baked goods, such as bread, rolls, bagels, pizza dough, or 
similar products, cannot use soft wheat flour in place of hard wheat 
flour to produce those goods because the finished goods will not 
``rise'' or have the texture that baked-goods consumers expect and 
demand. Consequently, hard wheat flour customers generally do not 
regard other types of flour as adequate substitutes for hard wheat 
flour. Thus, hard wheat flour is a relevant product market.
    Due to soft wheat flour's unique characteristics, flour consumers 
also use soft wheat flour for specific applications and cannot use 
other types of flour for those applications. For example, a baker that 
produces lighter, flakier products, such as cakes, cookies, crackers, 
or pastries, cannot use hard wheat flour in place of soft wheat flour 
to produce those goods because the finished goods will not remain 
flat--as is desirable for crackers or pastries--or have the texture 
that that baked-goods consumers expect and demand. Consequently, soft 
wheat flour customers generally do not regard other types of flour as 
adequate substitutes for soft wheat flour. Thus, soft wheat flour is a 
relevant product market.

D. Relevant Geographic Markets

    The Complaint alleges that the relevant geographic markets are 
Northern California, Southern California, Northern Texas, and the Upper 
Midwest. These markets are defined based on metropolitan statistical 
areas (``MSAs'') as follows:
     Northern California encompasses the Santa Rosa-Petaluma, 
Napa, Sacramento-Arden-Arcade-Roseville, Stockton, Vallejo-Fairfield, 
San Francisco-Oakland-Fremont, Santa Cruz-Watsonville, San Jose-
Sunnyvale-Santa Clara, Merced, and Modesto MSAs;
     Southern California encompasses the Los Angeles-Long 
Beach-Santa Ana, Riverside-San Bernardino-Ontario, and San Diego-
Carlsbad-San Marcos MSAs;
     Northern Texas encompasses the Dallas-Fort Worth-Arlington 
MSA; and the
     Upper Midwest encompasses the Minneapolis-St. Paul-
Bloomington, Eau Claire, Madison, La Crosse, and Rochester MSAs.
    The relevant geographic markets in this case are best defined by 
the locations of customers. Flour millers take into account rivals' 
mills that can economically supply a customer when determining the 
price at which to sell to that customer. Because transportation costs 
are an important component of the delivered price of flour, local mills 
tend to be more cost-effective sources of supply than mills located 
further away from the customer. When a customer has few local mills 
capable of supplying it with the flour it needs at a relatively low 
cost, a miller will charge a higher price to the customer. On the other 
hand, when a customer has many nearby mills capable of supplying it, a 
miller will charge a lower price. Thus, flour millers price differently 
to different customers depending on their location.
    Most flour customers are unable to defeat such pricing by 
arbitrage. That is, they cannot secure flour at a lower price from 
customers in other areas. Customers' ability to arbitrage is limited by 
transportation costs, which limit the distance that flour can be 
shipped cost effectively. In addition, securing flour from other 
customers increases the number of times that flour changes hands, and 
potentially increases the number of transportation modes used, which 
increases food safety and quality risks, making arbitrage by buying 
flour from customers in other areas undesirable.
    Because of differential pricing and the inability of most wheat 
flour customers to arbitrage, a hypothetical monopolist controlling the 
sale of all hard wheat flour to customers in Northern California, 
Southern California, Northern Texas, or the Upper Midwest, or the sale 
of all soft wheat flour to customers in Southern California or Northern 
Texas, would profitably impose a small but significant and 
nontransitory increase in the price (``SSNIP'') of each relevant 
product. It is appropriate to aggregate flour customers in each of 
these areas because each customer in the area faces similar

[[Page 30888]]

supply options and, hence, would similarly be affected by the formation 
of Ardent Mills.

E. Relevant SSNIP

    The Division applies the hypothetical monopolist test to help 
define relevant markets. This test asks whether a hypothetical 
monopolist of a product, or of a product in an area, would profitably 
impose a SSNIP. When applying the hypothetical monopolist test, the 
Division typically bases the SSNIP on the price of the final product to 
a consumer. In this case, however, the Division based the SSNIP 
primarily on the ``block,'' which is the primary component of the 
delivered price of flour that is determined by competition among 
millers.
    The use of a smaller SSNIP in this case is consistent with the 
Horizontal Merger Guidelines, which state that ``[w]here explicit or 
implicit prices for . . . firms' specific contribution to value can be 
identified with reasonable clarity,'' those prices (instead of the 
total price paid by customers) may be the relevant benchmark for 
analyzing whether a hypothetical monopolist would profitably impose a 
SSNIP.\3\ This method of analysis better directs attention to what 
``might result from a significant lessening of competition caused by'' 
the joint venture.\4\
---------------------------------------------------------------------------

    \3\ See U.S. Dep't of Justice and Federal Trade Commission, 
Horizontal Merger Guidelines Sec.  4.1.2 (2010), available at https://www.justice.gov/atr/public/guidelines/hmg-2010 html.
    \4\ Id.
---------------------------------------------------------------------------

    Flour millers' specific contribution to value largely involves the 
conversion of wheat into flour, for which the block is the primary form 
of compensation. Moreover, competition among wheat flour millers 
largely is centered on the block, whether explicitly (for customers who 
seek to identify each of the five components of delivered price) or 
implicitly (for customers who pay a flat delivered price). Thus, the 
lessening of competition resulting from the formation of Ardent Mills 
largely would result in an increase in the block, which in turn would 
increase the delivered price of flour to customers. As a result, basing 
the SSNIP primarily on the block, rather than the delivered price of 
flour, is appropriate in this case.

F. Competitive Effects of the Proposed Joint Venture

    The Complaint alleges that the formation of Ardent Mills would 
eliminate head-to-head competition between ConAgra Mills and Horizon 
for sales to individual customers, increase the likelihood of capacity 
closures, and increase the likelihood of anticompetitive coordination 
among wheat flour millers.
1. Market Shares and Concentration
    The Complaint alleges that the formation of Ardent Mills would 
increase concentration in each relevant market. Market concentration 
levels often indicate the likely competitive effects of a transaction--
the higher the concentration, and the more the proposed transaction 
would increase concentration, the greater the likelihood that the 
transaction would reduce competition. The Complaint alleges that each 
relevant market is already concentrated, and that the joint venture 
would significantly increase concentration in each market, indicating 
that the joint venture likely would substantially lessen competition in 
the relevant markets.
    Due to transportation costs--which increase as shipping distances 
increase--most competition in the relevant markets occurs among millers 
with flour mills that are close to customers in the relevant geographic 
markets. In particular, mills located close enough to customers to 
allow for economical direct truck shipments of flour (i.e., no more 
than 150 to 200 miles from customers) typically are the most effective 
competitors for those customers' business. Although some millers 
located more than 200 miles from a customer may sell flour into a 
geographic market, higher transportation costs typically render distant 
millers less competitive.
    Detailed information on the sales and costs of each miller selling 
into a geographic market would permit one to compute sales shares for 
each relevant market. Absent that information, market shares and 
concentration levels based on milling capacity within 200 miles of key 
cities within each market serve to illuminate the likely competitive 
effects of the joint venture. Each such 200-mile area includes the 
flour millers who typically can serve customers at the lowest cost, and 
competition will most directly be affected by a loss of competition 
among those millers.
    The market shares and concentration levels identified in the 
Complaint indicate that the formation of Ardent Mills would give it a 
large share of capacity--as well as a large share of sales--
presumptively enhancing market power in each relevant market. 
Transactions are presumed likely to enhance market power where they 
would raise a measure of market concentration called the Herfindahl-
Hirschman Index (``HHI'') \5\ more than 200 points to a total of more 
than 2500 points. In each relevant market, the formation of Ardent 
Mills would do so:
---------------------------------------------------------------------------

    \5\ See U.S. Dep't of Justice and Federal Trade Commission, 
Horizontal Merger Guidelines Sec.  5.3 (2010), available at https://www.justice.gov/atr/public/guidelines/hmg-2010 html. The HHI is 
calculated by squaring the market share of each firm competing in 
the market and then summing the resulting numbers. For example, for 
a market consisting of four firms with shares of 30, 30, 20, and 20 
percent, the HHI is 2,600 (302 + 302 + 202 + 202 = 2,600). The HHI 
takes into account the relative size distribution of the firms in a 
market. It approaches zero when a market is occupied by a large 
number of firms of relatively equal size and reaches its maximum of 
10,000 points when a market is controlled by a single firm. The HHI 
increases both as the number of firms in the market decreases and as 
the disparity in size between those firms increases.
---------------------------------------------------------------------------

     Northern California. Ardent Mills would own two mills in 
this area comprising approximately 70 percent of the hard wheat flour 
capacity within 200 miles of San Francisco. The joint venture would 
increase the HHI for hard wheat flour in this market to more than 
5,000.
     Southern California. Ardent Mills would own three mills in 
this area comprising more than 40 percent of hard wheat flour milling 
capacity within 200 miles of Los Angeles; the joint venture would 
increase the HHI for hard wheat flour in this market to more than 
2,500. Ardent Mills would also own two mills comprising more than 70 
percent of soft wheat flour milling capacity; the joint venture would 
increase the HHI for soft wheat flour in this market to more than 
5,500.
     Northern Texas. Ardent Mills would own three mills in this 
area comprising more than 75 percent of hard wheat flour milling 
capacity within 200 miles of Dallas-Ft. Worth. The joint venture would 
increase the HHI for hard wheat flour to more than 6,000. Ardent Mills 
would also own two mills comprising all soft wheat flour milling 
capacity, increasing the HHI for soft wheat flour to 10,000.
     Upper Midwest. Ardent Mills would control six mills in 
this area comprising more than 60 percent of the hard wheat flour 
milling capacity within 200 miles of Minneapolis. The joint venture 
would increase the HHI for hard wheat flour in this market to more than 
4,500.
2. Elimination of Head-to-Head Competition
    The Complaint alleges that the formation of the joint venture 
likely would substantially lessen competition in the relevant markets 
by eliminating head-to-head competition between ConAgra Mills and 
Horizon. Horizon

[[Page 30889]]

and ConAgra Mills operate mills that are close to one another in the 
relevant geographic markets, and that are among those closest to many 
customers in those markets. Because their mills are the closest mills 
to many customers, Horizon's and ConAgra's delivered flour costs tend 
to be lower than those of their rivals' more distant mills. Moreover, 
because their mills are located close to one another, Horizon's and 
ConAgra's flour transportation costs tend to be similar.
    As a result of the proximity of their mills to one another--and to 
one another's customers--Horizon and ConAgra frequently are among the 
lowest-cost flour suppliers in the relevant markets, and they compete 
aggressively against one another to make sales in those markets by 
offering a lower delivered price to their customers. Indeed, wheat 
flour customers in the relevant markets have obtained lower flour 
prices--largely by securing a smaller block--by playing ConAgra Mills 
and Horizon against one another during negotiations. The formation of 
Ardent Mills would eliminate that competition, resulting in higher hard 
wheat flour prices for customers in Northern California, Southern 
California, Northern Texas, and the Upper Midwest, and higher soft 
wheat flour prices for customers in Southern California and Northern 
Texas.
3. Increased Likelihood of Capacity Closures
    The Complaint alleges that the formation of Ardent Mills likely 
would substantially lessen competition in the relevant markets by 
increasing the likelihood of unilateral, anticompetitive capacity 
closures.
    A miller will find it profitable to unilaterally close capacity if 
any lost profit due to lower sales would be more than offset by a 
corresponding increase in profit on sales made at a higher price due to 
the capacity closure. A wheat flour miller with a relatively large base 
of milling capacity that can benefit from a price increase has a 
greater incentive to shut capacity, forcing higher cost capacity to 
step in and increase flour production to meet demand. The joint venture 
would significantly increase Ardent Mills's base of capacity relative 
to that of ConAgra Mills or Horizon standing alone, giving Ardent Mills 
a greater incentive to unilaterally close capacity than either ConAgra 
Mills or Horizon would have had.
    Ardent Mills also would have a greater ability to unilaterally 
close capacity than either ConAgra Mills or Horizon. Relatively high-
cost mills make an attractive target for capacity closures. All else 
equal, higher-cost capacity yields lower profits. Closing high-cost 
capacity is more attractive than closing low-cost capacity because 
profits lost due to closing high-cost capacity are smaller. Because the 
joint venture would give Ardent Mills a broader array of capacity from 
which to choose capacity to close--including relatively high-cost 
capacity--it would increase the ability of the joint venture to 
profitably shut down capacity. When combined with the increased 
incentive to close capacity, this increased ability increases the 
likelihood that Ardent Mills will close capacity, with the result that 
Ardent Mills and its remaining rivals will compete less aggressively 
for the business of flour customers, ultimately increasing prices in 
the relevant markets.
4. Increased Likelihood of Anticompetitive Coordination
    The Complaint alleges that the formation of Ardent Mills likely 
would substantially lessen competition in the relevant markets by 
increasing the likelihood of anticompetitive coordination among flour 
millers. Such coordination occurs where competing firms reach implicit 
or explicit agreements on output, capacity, price, quality, or other 
aspects of competition. Such coordination also could occur as a result 
of parallel accommodating conduct. As described in Section 7 of the 
Merger Guidelines, ``[p]arallel accommodating conduct [involves] 
situations in which each rival's response to competitive moves made by 
others is individually rational, and not motivated by retaliation or 
deterrence nor intended to sustain an agreed-upon market outcome, but 
nevertheless emboldens price increases and weakens competitive 
incentives to reduce prices or offer customers better terms.''
    Several features of hard wheat flour and soft wheat flour markets 
render them susceptible to coordination. In particular, the Complaint 
alleges these markets are transparent; that soft and hard wheat flour 
are homogeneous and purchased frequently; that demand for soft and hard 
wheat flour is inelastic; and that larger millers compete against one 
another in multiple geographic markets. By eliminating a significant 
independent competitor from each of the relevant markets, which already 
are highly concentrated and are susceptible to anticompetitive 
coordination, the joint venture would substantially increase the 
likelihood of coordination among Ardent Mills and its few remaining 
rivals.
    The joint venture would further increase the likelihood of 
anticompetitive coordination by permitting Cargill and CHS to share 
certain wheat-related information with Ardent Mills. Under side 
agreements to the Master Agreement forming Ardent Mills, Cargill and 
CHS (both of which own grain trading businesses that would operate 
independently of Ardent) are to be preferred suppliers to the joint 
venture. These side agreements may permit Cargill and CHS to give 
Ardent Mills information regarding wheat purchases and wheat uses by 
the joint venture's rival millers. The exchange of such information 
would make it easier for Ardent to monitor its rivals' behavior and 
discipline deviations from coordinated strategies, substantially 
increasing the likelihood of coordination in the relevant markets.

III. EXPLANATION OF THE PROPOSED FINAL JUDGMENT

A. Divestiture Requirement

    The Proposed Final Judgment requires divestitures of individual 
wheat flour mills that will eliminate the anticompetitive effects of 
the formation of Ardent Mills by establishing a substantial, 
independent and economically viable competitor in each relevant market. 
The divestitures are to be made to Miller Milling Company, LLC 
(``Miller Milling''). As explained in the Antitrust Division Policy 
Guide to Merger Remedies, the Antitrust Division may require such 
upfront buyers when a divested package is less than an existing 
business entity.\6\ In this case, the mills to be divested are not 
existing business entities; rather, the operation of each mill is 
intertwined with the operation of Defendants' other wheat flour 
mills.\7\ An upfront buyer is appropriate to ensure that the acquirer 
will have all assets necessary to be an effective, long-term competitor 
in the production and sale of flour. The United States can evaluate the 
ability of a buyer to take the Divestiture Assets and operate them as 
part of a complete flour milling company that can replace the 
competition lost due to the proposed joint venture.
---------------------------------------------------------------------------

    \6\ U.S. Department of Justice, Antitrust Division Policy Guide 
to Merger Remedies (June 2011), available at https://www.justice.gov/atr/public/guidelines/272350.pdf (identifying an upfront buyer 
provides greater assurance that the divestiture package contains the 
assets needed to create a viable entity that will preserve 
competition).
    \7\ The purchase of wheat, sale of flour, and arrangement of 
transportation of wheat and flour are examples of functions that are 
centralized rather than based at the mill sites.
---------------------------------------------------------------------------

    The Proposed Final Judgment requires Defendants, within ten (10) 
days after the Court signs the Hold Separate Stipulation and Order, to 
divest to

[[Page 30890]]

Miller Milling four mills: ConAgra's mills located in New Prague, 
Minnesota; Oakland, California; and Saginaw, Texas; and Horizon's mill 
located in Los Angeles, California. In its sole discretion, the United 
States may agree to one or more extensions of this period not to exceed 
thirty (30) days in total. As the United States already has approved 
the acquirer, any such extensions need not be as long as ordinarily is 
the case when acquirers are not identified upfront. Defendants must 
take all reasonable steps necessary to accomplish the divestiture 
quickly and shall cooperate with prospective purchasers.
    In the event that, through no action of the Defendants, the sale of 
any of the Divestiture Assets cannot be completed, the Final Judgment 
provides for the United States, in its sole discretion, to agree to the 
sale of the unsold Divestiture Assets to an alternative purchaser 
approved by the United States. If Defendants fail to sell the 
Divestiture assets to Miller Milling or approved alternative purchasers 
within the time permitted by the Final Judgment, the Final Judgment 
provides that the Court will appoint a trustee selected by the United 
States to effect the divestiture.
    If a trustee is appointed, the Proposed Final Judgment provides 
that Defendants will pay all costs and expenses of the trustee. The 
trustee's commission will be structured so as to provide an incentive 
for the trustee based on the price obtained and the speed with which 
the divestiture is accomplished. After the trustee's appointment 
becomes effective, the trustee will file monthly reports with the Court 
and the United States setting forth his or her efforts to accomplish 
the divestiture. At the end of six months, if the divestiture has not 
been accomplished, the trustee and the United States will make 
recommendations to the Court, which shall enter such orders as 
appropriate, in order to carry out the purpose of the trust, including 
extending the trust or the term of the trustee's appointment.
    In addition, because experienced, knowledgeable personnel are 
critical to success in the relevant markets--and may be even more 
critical to a new entrant seeking to secure customers' business--the 
Proposed Final Judgment provides the acquirer(s) with an expansive 
right to hire relevant personnel without interference. The Proposed 
Final Judgment gives the acquirer(s) the right to hire any and all of 
Defendants' employees who are employed at, purchase or advise on the 
purchase of wheat or wheat futures for, provide instructions, guidance, 
or assistance relating to food safety or quality assurance for, or sell 
or arrange for transportation of wheat flour or any wheat flour 
byproducts from the assets to be divested. The Proposed Final Judgment 
contains numerous provisions to facilitate the hiring and retention of 
these employees. These provisions require Defendants to provide 
detailed information about each relevant employee, to grant reasonable 
access to relevant employees and the ability to interview them, and to 
refrain from interfering with negotiations to hire any relevant 
employee.

B. Nondisclosure of Wheat Customer Confidential Information Requirement

    The Proposed Final Judgment prohibits Cargill, CHS, and ConAgra 
from disclosing to Ardent Mills any non-public, customer-specific 
information relating to wheat sales or usage, and it prohibits Ardent 
Mills from soliciting or receiving such information from Cargill, CHS, 
or ConAgra, or from using such information. No later than seven (7) 
calendar days after the Final Judgment is entered by the Court, the 
Proposed Final Judgment requires Defendants to distribute a copy of the 
Final Judgment to each of their employees with responsibility for wheat 
sales or flour sales. The Proposed Final Judgment requires Defendants 
to distribute a copy of the Final Judgment and this Competitive Impact 
Statement to each of their employees with responsibility for wheat 
sales or flour sales, as well as to any person who succeeds to a 
position with responsibility for wheat sales or flour sales within 
thirty (30) calendar days of that succession. These documents also are 
to be distributed annually to such employees.

IV. REMEDIES AVAILABLE TO POTENTIAL PRIVATE LITIGANTS

    Section 4 of the Clayton Act, 15 U.S.C. Sec.  15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the Proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
Sec.  16(a), the Proposed Final Judgment has no prima facie effect in 
any subsequent private lawsuit that may be brought against Defendants.

V. PROCEDURES AVAILABLE FOR MODIFICATION OF THE PROPOSED FINAL JUDGMENT

    The United States and Defendants have stipulated that the Proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APPA, provided that the United States has not 
withdrawn its consent. The APPA conditions entry upon the Court's 
determination that the Proposed Final Judgment is in the public 
interest. The APPA provides a period of at least sixty (60) days 
preceding the effective date of the Proposed Final Judgment within 
which any person may submit to the United States written comments 
regarding the Proposed Final Judgment. Any person who wishes to comment 
should do so within sixty (60) days of the date of publication of this 
Competitive Impact Statement in the Federal Register, or the last date 
of publication in a newspaper of the summary of this Competitive Impact 
Statement, whichever is later. All comments received during this period 
will be considered by the U.S. Department of Justice, which remains 
free to withdraw its consent to the Proposed Final Judgment at any time 
prior to the Court's entry of judgment. The comments and the response 
of the United States will be filed with the Court. In addition, 
comments will be posted on the U.S. Department of Justice, Antitrust 
Division's internet Web site and, under certain circumstances, 
published in the Federal Register.
    Written comments should be submitted to: Maribeth Petrizzi, Chief, 
Litigation II Section, Antitrust Division, United States Department of 
Justice, 450 Fifth Street NW., Suite 8700, Washington, DC 20530.
    The Proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and the parties may apply to the Court 
for any order necessary or appropriate for the modification, 
interpretation, or enforcement of the Final Judgment.

VI. ALTERNATIVES TO THE PROPOSED FINAL JUDGMENT

    The United States considered, as an alternative to the Proposed 
Final Judgment, a full trial on the merits against Defendants. The 
United States could have continued the litigation and sought 
preliminary and permanent injunctions against Defendants' formation of 
Ardent Mills. The United States is satisfied, however, that the 
divestiture of assets requirement and the nondisclosure of wheat 
customer confidential information requirement

[[Page 30891]]

described in the Proposed Final Judgment will preserve competition for 
the provision of hard wheat flour to customers in Northern California, 
Southern California, Northern Texas, and the Upper Midwest, and for the 
provision of soft wheat flour to customers in Southern California and 
Northern Texas, the relevant markets identified by the United States. 
Thus, the Proposed Final Judgment would achieve all or substantially 
all of the relief the United States would have obtained through 
litigation, but avoids the time, expense, and uncertainty of a full 
trial on the merits of the Complaint.

VII. STANDARD OF REVIEW UNDER THE APPA FOR THE PROPOSED FINAL JUDGMENT

    The Clayton Act, as amended by the APPA, requires that proposed 
consent judgments in antitrust cases brought by the United States be 
subject to a sixty-day comment period, after which the court shall 
determine whether entry of the Proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. Sec.  16(e)(1). In making that 
determination, the court, in accordance with the statute as amended in 
2004, is required to consider:

    (A) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration of relief sought, anticipated effects of 
alternative remedies actually considered, whether its terms are 
ambiguous, and any other competitive considerations bearing upon the 
adequacy of such judgment that the court deems necessary to a 
determination of whether the consent judgment is in the public 
interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and 
individuals alleging specific injury from the violations set forth 
in the complaint 7 including consideration of the public benefit, if 
any, to be derived from a determination of the issues at trial.

15 U.S.C. Sec.  16(e)(1)(A) & (B). In considering these statutory 
factors, the court's inquiry is necessarily a limited one, as the 
government is entitled to ``broad discretion to settle with the 
defendant within the reaches of the public interest.'' United States v. 
Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); see generally 
United States v. SBC Commc'ns, Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) 
(assessing the public interest standard under the Tunney Act); United 
States v. InBev N.V./S.A., 2009-2 Trade Cas. (CCH) ] 76,736, 2009 U.S. 
Dist. LEXIS 84787, No. 08-1965 (JR), at *3, (D.D.C. Aug. 11, 2009) 
(noting that the court's review of a consent judgment is limited and 
only inquires ``into whether the government's determination that the 
proposed remedies will cure the antitrust violations alleged in the 
complaint was reasonable, and whether the mechanism to enforce the 
final judgment are clear and manageable'').\8\
---------------------------------------------------------------------------

    \8\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for court to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
Sec.  16(e) (2004), with 15 U.S.C. Sec.  16(e)(1) (2006); see also 
SBC Commc'ns, 489 F. Supp. 2d at 11 (concluding that the 2004 
amendments ``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------

    As the United States Court of Appeals for the District of Columbia 
Circuit has held, under the APPA a court considers, among other things, 
the relationship between the remedy secured and the specific 
allegations set forth in the government's complaint, whether the decree 
is sufficiently clear, whether enforcement mechanisms are sufficient, 
and whether the decree may positively harm third parties. See 
Microsoft, 56 F.3d at 1458-62. With respect to the adequacy of the 
relief secured by the decree, a court may not ``engage in an 
unrestricted evaluation of what relief would best serve the public.'' 
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (citing 
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see 
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152 
F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787, 
at *3. Courts have held that:

[t]he balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to determine not whether a 
particular decree is the one that will best serve society, but 
whether the settlement is ``within the reaches of the public 
interest.'' More elaborate requirements might undermine the 
effectiveness of antitrust enforcement by consent decree.

Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\9\ In 
determining whether a proposed settlement is in the public interest, a 
district court ``must accord deference to the government's predictions 
about the efficacy of its remedies, and may not require that the 
remedies perfectly match the alleged violations.'' SBC Commc'ns, 489 F. 
Supp. 2d at 17; see also Microsoft, 56 F.3d at 1461 (noting the need 
for courts to be ``deferential to the government's predictions as to 
the effect of the proposed remedies''); United States v. Archer-
Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that 
the court should grant due respect to the United States' prediction as 
to the effect of proposed remedies, its perception of the market 
structure, and its views of the nature of the case).
---------------------------------------------------------------------------

    \9\ Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); United States v. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the 
court is constrained to ``look at the overall picture not 
hypercritically, nor with a microscope, but with an artist's 
reducing glass''). See generally Microsoft, 56 F.3d at 1461 
(discussing whether ``the remedies [obtained in the decree are] so 
inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest' '').
---------------------------------------------------------------------------

    Courts have greater flexibility in approving proposed consent 
decrees than in crafting their own decrees following a finding of 
liability in a litigated matter. ``[A] proposed decree must be approved 
even if it falls short of the remedy the court would impose on its own, 
as long as it falls within the range of acceptability or is `within the 
reaches of public interest.' '' United States v. Am. Tel. & Tel. Co., 
552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting United 
States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd 
sub nom. Maryland v. United States, 460 U.S. 1001 (1983); see also 
United States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 
1985) (approving the consent decree even though the court would have 
imposed a greater remedy). To meet this standard, the United States 
``need only provide a factual basis for concluding that the settlements 
are reasonably adequate remedies for the alleged harms.'' SBC Commc'ns, 
489 F. Supp. 2d at 17.
    Moreover, the court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and the APPA does not authorize the court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459; see also InBev, 2009 
U.S. Dist. LEXIS 84787, at *20 (``[T]he `public interest' is not to be 
measured by comparing the violations alleged in the complaint against 
those the court believes could have, or even should have, been 
alleged.''). Because the ``court's authority to review the decree 
depends entirely on the government's exercising its prosecutorial 
discretion by bringing a case in the first place,'' it follows that 
``the court is only authorized to review the decree itself,'' and not 
to ``effectively redraft the complaint'' to inquire into other matters 
that the United States did not pursue. Microsoft, 56 F.3d at 1459-60. 
As this Court recently confirmed in

[[Page 30892]]

SBC Communications, courts ``cannot look beyond the complaint in making 
the public interest determination unless the complaint is drafted so 
narrowly as to make a mockery of judicial power.'' SBC Commc'ns, 489 F. 
Supp. 2d at 15.
    In its 2004 amendments, Congress made clear its intent to preserve 
the practical benefits of utilizing consent decrees in antitrust 
enforcement, adding the unambiguous instruction that ``[n]othing in 
this section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. Sec.  16(e)(2). The language wrote into the 
statute what Congress intended when it enacted the Tunney Act in 1974, 
as Senator Tunney explained: ``The court is nowhere compelled to go to 
trial or to engage in extended proceedings which might have the effect 
of vitiating the benefits of prompt and less costly settlement through 
the consent decree process.'' 119 Cong. Rec. 24,598 (1973) (statement 
of Senator Tunney). Rather, the procedure for the public interest 
determination is left to the discretion of the court, with the 
recognition that the court's ``scope of review remains sharply 
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC 
Commc'ns, 489 F. Supp. 2d at 11.\10\
---------------------------------------------------------------------------

    \10\ See United States v. Enova Corp., 107 F. Supp. 2d 10, 17 
(D.D.C. 2000) (noting that the ``Tunney Act expressly allows the 
court to make its public interest determination on the basis of the 
competitive impact statement and response to comments alone''); 
United States v. Mid-Am. Dairymen, Inc., 1977-1 Trade Cas. (CCH) ] 
61,508, at 71,980 (W.D. Mo. 1977) (``Absent a showing of corrupt 
failure of the government to discharge its duty, the Court, in 
making its public interest finding, should . . . carefully consider 
the explanations of the government in the competitive impact 
statement and its responses to comments in order to determine 
whether those explanations are reasonable under the 
circumstances.''); S. Rep. No. 93-298, 93d Cong., 1st Sess., at 6 
(1973) (``Where the public interest can be meaningfully evaluated 
simply on the basis of briefs and oral arguments, that is the 
approach that should be utilized.'').
---------------------------------------------------------------------------

VIII. DETERMINATIVE DOCUMENTS

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the United States in 
formulating the Proposed Final Judgment.

Dated: May 20, 2014

Respectfully submitted,

-----------------------------------------------------------------------
JOHN M. NEWMAN
Attorney
Antitrust Division

MARK J. NIEFER*
(D.C. BAR 470370)
Attorney
Antitrust Division
U.S. Department of Justice
450 Fifth Street, NW., Suite 8000
Washington, DC 20530
Telephone: (202) 307-6318
Facsimile: (202) 616-2441
Email: mark.niefer@usdoj.gov

*Attorney of Record

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Plaintiff,

v.

CONAGRA FOODS, INC.,
HORIZON MILLING, LLC,
CARGILL INCORPORATED,

and

CHS INC.,

Defendants.

Case No.: 1:14-cv-00823
Judge: Hon. Ketanji Brown Jackson
Dated: May 20, 2014

PROPOSED FINAL JUDGMENT

    WHEREAS, Plaintiff United States of America (``United States'') 
filed its Complaint on May 20, 2014, the United States and Defendants, 
by their respective attorneys, have consented to the entry of this 
Final Judgment without trial or adjudication of any issue of fact or 
law, and without this Final Judgment constituting any evidence against 
or admission by any party regarding any issue of fact or law;
    AND WHEREAS, Defendants agree to be bound by the provisions of this 
Final Judgment pending its approval by the Court;
    AND WHEREAS, the essence of this Final Judgment is the prompt and 
certain divestiture of certain rights or assets by Defendants to assure 
that competition is not substantially lessened;
    AND WHEREAS, the United States requires Defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    AND WHEREAS, Defendants have represented to the United States that 
the divestitures required below can and will be made and that 
Defendants will later raise no claim of mistake, hardship or difficulty 
of compliance as grounds for asking the Court to modify any of the 
provisions contained below;
    NOW THEREFORE, before any testimony is taken, without trial or 
adjudication of any issue of fact or law, and upon consent of the 
parties, it is ORDERED, ADJUDGED, AND DECREED:

I. JURISDICTION

    This Court has jurisdiction over the subject matter of and each of 
the parties to this action. The Complaint states a claim upon which 
relief may be granted against Defendants under Section 7 of the Clayton 
Act, as amended (15 U.S.C. Sec.  18), and Section 1 of the Sherman Act, 
15 U.S.C. Sec.  1.

II. DEFINITIONS

    As used in this Final Judgment:
    A. ``Acquirer'' means Miller Milling, or another entity or entities 
to which Defendants divest the Los Angeles Mill, the New Prague Mill, 
the Oakland Mill, and the Saginaw Mill.
    B. ``Ardent Mills'' means the joint venture that will be formed by 
the Transaction.
    C. ``Cargill'' means Defendant Cargill Incorporated, a privately 
held company that is incorporated in Delaware and headquartered in 
Wayzata, Minnesota, its successors and assigns, and its subsidiaries, 
divisions, groups, affiliates, partnerships and joint ventures, 
including Ardent Mills, and their directors, officers, managers, 
agents, and employees.
    D. ``CHS'' means Defendant CHS Inc., a Minnesota corporation 
headquartered in Inver Grove Heights, Minnesota, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, including Ardent Mills, and their 
directors, officers, managers, agents, and employees.
    E. ``ConAgra'' means Defendant ConAgra Foods, Inc., a Delaware 
corporation headquartered in Omaha, Nebraska, its successors and 
assigns, and its subsidiaries, divisions, groups, affiliates, 
partnerships and joint ventures, including Ardent Mills, and their 
directors, officers, managers, agents, and employees.
    F. ``Horizon'' means Defendant Horizon Milling, LLC, a joint 
venture between Cargill and CHS headquartered in Wayzata, Minnesota, 
its successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships and joint ventures, including Ardent Mills, 
and their directors, officers, managers, agents, and employees.
    G. ``Divestiture Assets'' means the assets listed in Schedule A.
    H. ``Los Angeles Mill'' means Item 2 on Schedule A and the assets 
associated with Item 2 that are listed in Item 3 on Schedule A.
    I. ``New Prague Mill'' means Item 1(a) on Schedule A and the assets 
associated with Item 1(a) that are listed in Item 3 on Schedule A.
    J. ``Oakland Mill'' means Item 1(b) on Schedule A and the assets 
associated with Item 1(b) that are listed in Item 3 on Schedule A.

[[Page 30893]]

    K. ``Saginaw Mill'' means Item 1(c) on Schedule A and the assets 
associated with Item 1(c) that are listed in Item 3 on Schedule A.
    L. ``Miller Milling'' means Miller Milling Company, LLC, a 
Minnesota limited liability company headquartered in Minneapolis, 
Minnesota, its parent, its successors and assigns, and its 
subsidiaries, divisions, groups, affiliates, partnerships and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    M. ``Transaction'' means the proposed formation of the Ardent Mills 
Joint Venture pursuant to the March 4, 2013 Master Agreement by and 
among ConAgra, Cargill, CHS, and HM Luxembourg S.A.R.L., as amended.
    N. ``Wheat Customer Confidential Information'' means any customer-
specific information not in the public domain that reflects:
    1. wheat sales by Defendants to customers or potential customers 
other than Ardent Mills, including, but not limited to, the type of 
wheat purchased, origination or delivery point of purchased wheat, date 
of purchase, purchase price or quantities, or mode or cost of delivery; 
or
    2. wheat use by such customers or potential customers (other than 
Defendants in connection with their wheat use to manufacture products 
for themselves or others), including, but not limited to, the types of 
products produced using wheat as an input, and the price charged, 
quantity produced, or capacity or cost to produce such products.

III. APPLICABILITY

    A. This Final Judgment applies to Defendants and all other persons 
in active concert or participation with any of them who receive actual 
notice of this Final Judgment by personal service or otherwise.
    B. If, prior to complying with Sections IV and V of this Final 
Judgment, Defendants sell or otherwise dispose of all or substantially 
all of their assets or of lesser business units that include the 
Divestiture Assets, they shall require the purchaser to be bound by the 
provisions of this Final Judgment. Defendants need not obtain such an 
agreement from the Acquirer(s) of the assets divested pursuant to this 
Final Judgment.

IV. DIVESTITURES

    A. Defendants are ordered and directed, within ten (10) calendar 
days after the Court signs the Hold Separate Stipulation and Order in 
this matter, to divest the Los Angeles Mill, New Prague Mill, Oakland 
Mill, and Saginaw Mill to Miller Milling in a manner consistent with 
this Final Judgment. Defendants shall use their best efforts to 
accomplish the divestitures ordered by this Final Judgment as 
expeditiously as possible. The United States, in its sole discretion, 
may agree to one or more extensions of this time period not to exceed 
thirty (30) calendar days in total, and shall notify the Court of any 
such extension. In the event that, through no action of Defendants, the 
sale of any of the Divestiture Assets cannot be consummated, the United 
States, in its sole discretion, may agree to the sale of the unsold 
Divestiture Assets to an alternative Acquirer(s) approved by the United 
States.
    B. Defendants shall offer to furnish to Acquirer(s), subject to 
customary confidentiality assurances, all information and documents 
relating to the Divestiture Assets customarily provided in a due 
diligence process, except such information or documents subject to the 
attorney-client privilege or work-product doctrine. Defendants shall 
make available such information to the United States at the same time 
that such information is made available to the Acquirer(s).
    C. Defendants shall permit the Acquirer(s) to have reasonable 
access to personnel and to make inspections of the physical facilities 
associated with the Divestiture Assets; access to any and all 
environmental, zoning, and other permit documents and information; and 
access to any and all financial, operational, or other documents and 
information customarily provided as part of a due diligence process, 
except such information or documents subject to the attorney client 
privilege or the work-product doctrine.
    D. Defendants shall warrant to the Acquirer(s) that each asset will 
be operational on the date of sale.
    E. Defendants shall not take any action that will impede in any way 
the permitting, operation, or divestiture of the Divestiture Assets.
    F. Defendants shall warrant to the Acquirer(s) that there are no 
material defects in the environmental, zoning or other permits 
pertaining to the operation of each asset, and that following the sale 
of the Divestiture Assets, Defendants will not undertake, directly or 
indirectly, any challenges to the environmental, zoning, or other 
permits relating to the operation of the Divestiture Assets.
    G. At the option of the Acquirer(s) of the Divestiture Assets, 
Defendants shall enter into one or more transition services agreements. 
These agreements may include, but not be limited to, services relating 
to the packaging of flour, the purchase of wheat or other ingredients, 
the inbound transportation of wheat or other ingredients, the outbound 
transportation of flour or millfeed, or the milling of flour.
    1. The terms and conditions of any contractual arrangement meant to 
satisfy this provision must be reasonably related to market conditions. 
The duration of any transition services agreement shall not be longer 
than six (6) months from the date of divestiture. The United States, in 
its sole discretion, may approve an extension of the term of any 
transition services agreement for a period of up to six (6) months. If 
the Acquirer(s) seeks an extension of the term of any transition 
services agreement, it shall so notify the United States in writing at 
least two (2) months prior to the date the transition services 
agreement expires. The United States shall respond to any such request 
for extension in writing at least one (1) month prior to the date the 
transition services agreement expires.
    2. If in conjunction with a transition services agreement pursuant 
to Subparagraph (1) above, Defendants temporarily assign any employee 
to the Acquirer(s) to fill a position at a mill to be divested, such 
employee (a) shall not be assigned to Acquirer(s) longer than six (6) 
months from the date of divestiture of the Divestiture Assets; (b) 
shall be located at the mill; (c) shall not, during the temporary 
assignment, reveal to the Acquirer(s), or make use of, any non-public 
information concerning Defendants; (d) shall not, during or subsequent 
to the temporary assignment, reveal to Defendants or anyone else any 
non-public information concerning Acquirer(s); (e) shall not, 
subsequent to the temporary assignment, make use of any non-public 
information concerning Acquirer(s); and (f) shall not retain or convey 
to others any documents, data, or tangible things concerning the 
Acquirer(s) obtained during the temporary assignment. Any temporary 
employee assignment pursuant to this subparagraph IV(G)(2) cannot be 
extended beyond six (6) months, even if the United States, in its sole 
discretion, approves an extension of the related transition services 
agreement.
    3. Defendants shall distribute a copy of this Final Judgment and 
related Competitive Impact Statement to any employees who perform 
services for the Acquirer(s) pursuant to Paragraph IV(G)(2).
    H. Unless the United States otherwise consents in writing, the 
divestiture by Defendants pursuant to Section IV, or by the trustee 
appointed pursuant to Section V, of this Final Judgment, shall include 
the entire Divestiture Assets,

[[Page 30894]]

and shall be accomplished in such a way as to satisfy the United 
States, in its sole discretion, that the Divestiture Assets can and 
will be used by the Acquirer(s) as part of a viable ongoing business 
producing and selling wheat flour. Divestiture of the Divestiture 
Assets may be made to one or more Acquirers, provided that in each 
instance it is demonstrated to the sole satisfaction of the United 
States that the Divestiture Assets will remain viable and the 
divestiture of such assets will remedy the competitive harm alleged in 
the Complaint. The divestitures, whether pursuant to Section IV or 
Section V of this Final Judgment:
    1. shall be made to an Acquirer(s) that, in the United States's 
sole judgment, has the intent and capability (including the necessary 
managerial, operational, technical and financial capability) of 
competing effectively as a producer and seller of wheat flour; and
    2. shall be accomplished so as to satisfy the United States, in its 
sole discretion, that none of the terms of any agreement between the 
Acquirer(s) and Defendants gives Defendants the ability unreasonably to 
raise the Acquirer's costs, to lower the Acquirer's efficiency, or 
otherwise to interfere in the ability of the Acquirer or Acquirers to 
compete effectively.

V. APPOINTMENT OF TRUSTEE

    A. If Defendants have not divested all of the Divestiture Assets 
within the time period specified in Paragraph IV(A), Defendants shall 
notify the United States of that fact in writing. Upon application of 
the United States, the Court shall appoint a trustee selected by the 
United States and approved by the Court to effect the divestiture of 
any of the Divestiture Assets not yet divested.
    B. After the appointment of a trustee becomes effective, only the 
trustee shall have the right to sell the Divestiture Assets. The 
trustee shall have the power and authority to accomplish the 
divestiture to an Acquirer(s) acceptable to the United States at such 
price and on such terms as are then obtainable upon reasonable effort 
by the trustee, subject to the provisions of Sections IV, V, and VI of 
this Final Judgment, and shall have such other powers as this Court 
deems appropriate. Subject to Paragraph V(D) of this Final Judgment, 
the trustee may hire at the cost and expense of Defendants any 
investment bankers, attorneys, or other agents, who shall be solely 
accountable to the trustee, reasonably necessary in the trustee's 
judgment to assist in the divestiture.
    C. Defendants shall not object to a sale by the trustee on any 
ground other than the trustee's malfeasance. Any such objections by 
Defendants must be conveyed in writing to the United States and the 
trustee no later than ten (10) calendar days after the trustee has 
provided the notice required under Section VI.
    D. The trustee shall serve at the cost and expense of Defendants, 
on such terms and conditions as the United States approves, including 
confidentiality requirements and conflict of interest certifications. 
The trustee shall account for all monies derived from the sale of the 
assets sold by the trustee and all costs and expenses so incurred. 
After approval by the Court of the trustee's accounting, including fees 
for its services yet unpaid and those of any professionals and agents 
retained by the trustee, all remaining money shall be paid to 
Defendants and the trust shall be terminated. The compensation of the 
trustee and any professionals and agents retained by the trustee shall 
be reasonable in light of the value of the Divestiture Assets and based 
on a fee arrangement providing the trustee with an incentive based on 
the price and terms of the divestiture and the speed with which it is 
accomplished, but timeliness is paramount. If the trustee and 
Defendants are unable to reach agreement on the trustee's compensation 
or other terms and conditions of sale within fourteen (14) calendar 
days of appointment of the trustee, the United States may, in its sole 
discretion, take appropriate action, including making a recommendation 
to the Court.
    E. Defendants shall use their best efforts to assist the trustee in 
accomplishing the required divestitures. The trustee and any 
consultants, accountants, attorneys, and other agents retained by the 
trustee shall have full and complete access to the personnel, books, 
records, and facilities of the assets to be divested, and Defendants 
shall develop financial and other information relevant to such business 
as the trustee may reasonably request, subject to reasonable protection 
for trade secret or other confidential research, development, or 
commercial information, except such information or documents subject to 
the attorney client privilege or work-product doctrine. Defendants 
shall take no action to interfere with or to impede the trustee's 
accomplishment of the divestitures.
    F. After its appointment, the trustee shall file monthly reports 
with the United States and, as appropriate, the Court, setting forth 
the trustee's efforts to accomplish the divestitures ordered under this 
Final Judgment. To the extent such reports contain information that the 
trustee deems confidential, such reports shall not be filed in the 
public docket of the Court. Such reports shall include the name, 
address, and telephone number of each person who, during the preceding 
month, made an offer to acquire, expressed an interest in acquiring, 
entered into negotiations to acquire, or was contacted or made an 
inquiry about acquiring, any interest in the Divestiture Assets, and 
shall describe in detail each contact with any such person. The trustee 
shall maintain full records of all efforts made to divest the 
Divestiture Assets.
    G. If the trustee has not accomplished the divestitures ordered 
under this Final Judgment within six (6) months after the trustee's 
appointment, the trustee shall promptly file with the Court a report 
setting forth: (1) the trustee's efforts to accomplish the required 
divestitures; (2) the reasons, in the trustee's judgment, why the 
required divestitures have not been accomplished; and (3) the trustee's 
recommendations. To the extent such report contains information that 
the trustee deems confidential, such report shall not be filed in the 
public docket of the Court. The trustee shall at the same time furnish 
such report to the United States, which shall have the right to make 
additional recommendations consistent with the purpose of the trust. 
The Court thereafter shall enter such orders as it shall deem 
appropriate to carry out the purpose of the Final Judgment, which may, 
if necessary, include extending the trust and the term of the trustee's 
appointment by a period requested by the United States.
    H. If the United States determines that the trustee has ceased to 
act or failed to act diligently or in a reasonably cost-effective 
manner, it may recommend the Court appoint a substitute trustee.

VI. NOTICE OF PROPOSED DIVESTITURE

    A. If the trustee is responsible for effecting the divestitures 
required herein, within two (2) business days following execution of a 
definitive divestiture agreement, the trustee shall notify the United 
States and Defendants of any proposed divestiture required by Section V 
of this Final Judgment. The notice provided to the United States shall 
set forth the details of the proposed divestiture and list the name, 
address, and telephone number of each person not previously identified 
who offered or expressed an interest in or desire to acquire any 
ownership interest in the Divestiture Assets, together with full 
details of the same.
    B. Within fifteen (15) calendar days of receipt by the United 
States of such

[[Page 30895]]

notice, the United States may request from Defendants, the proposed 
Acquirer(s), any other third party, or the trustee, if applicable, 
additional information concerning the proposed divestiture, the 
proposed Acquirer(s), and any other potential Acquirer. Defendants and 
the trustee shall furnish any additional information requested, except 
such information or documents subject to the attorney client privilege 
or work-product doctrine within fifteen (15) calendar days of the 
receipt of the request, unless the parties shall otherwise agree.
    C. Within thirty (30) calendar days after receipt of the notice or 
within twenty (20) calendar days after the United States has been 
provided the additional information requested from Defendants, the 
proposed Acquirer or Acquirers, any third party, and the trustee, 
whichever is later, the United States shall provide written notice to 
Defendants and the trustee, if there is one, stating whether or not it 
objects to the proposed divestiture. If the United States provides 
written notice that it does not object, the divestiture may be 
consummated, subject only to Defendants' limited right to object to the 
sale under Paragraph V(C) of this Final Judgment. Absent written notice 
that the United States does not object to the proposed Acquirer(s) or 
upon objection by the United States, a divestiture proposed under 
Sections IV or V shall not be consummated. Upon objection by Defendants 
under Paragraph V(C), a divestiture proposed under Section V shall not 
be consummated unless approved by the Court.

VII. RIGHT TO HIRE

    A. To enable the Acquirer(s) to make offers of employment, 
Defendants shall provide the Acquirer(s) and the United States 
information relating to the personnel who are employed at, purchase 
wheat for, purchase or advise on the purchase of wheat futures for, 
provide instructions, guidance, or assistance relating to food safety 
or quality assurance for, or who sell or arrange transportation for 
flour, millfeed or any other product produced at any of the mills 
listed in 1(a)-(c) and 2 in Schedule A. The information provided by 
Defendants shall include for each employee his or her name, job title, 
responsibilities as of January 1, 2014, training and educational 
history, relevant certifications, and, to the extent permissible by 
law, job performance evaluations, and current salary and benefits 
information.
    B. Defendants shall make personnel available for interviews with 
the Acquirer(s) during normal business hours at a mutually agreeable 
location and will not interfere with any negotiations by the Acquirer 
or Acquirers to employ any of the personnel employed at the facilities 
listed in 1(a)-(c) and 2 in Schedule A. Interference with respect to 
this paragraph includes, but is not limited to, enforcement of 
noncompete and nondisclosure agreements and offers to increase an 
employee's salary or benefits other than as a part of a company-wide 
increase in salary or benefits.
    1. For each employee who elects employment by the Acquirer(s), 
Defendants shall vest all unvested pension and other equity rights of 
that employee and provide all benefits to which the employee would have 
been entitled if terminated without cause, per the terms of the 
applicable plan(s). Defendants also shall waive all noncompete and 
nondisclosure agreements.
    2. Nothing in this Section shall prohibit Defendants from 
maintaining any reasonable restriction on the disclosure by an employee 
who accepts an offer of employment with the Acquirer(s) of the 
Defendants' proprietary, non-public information that is (1) not 
otherwise required to be disclosed by this Final Judgment, (2) related 
solely to Defendants' businesses and clients, and (3) unrelated to the 
Divestiture Assets.

VIII. NONDISCLOSURE OF WHEAT CUSTOMER CONFIDENTIAL INFORMATION

    A. Cargill, CHS, and ConAgra shall not disclose to Ardent Mills any 
Wheat Customer Confidential Information.
    B. Ardent Mills shall not solicit or receive from Cargill, CHS, or 
ConAgra any Wheat Customer Confidential Information, or use any Wheat 
Customer Confidential Information received from Cargill, CHS, or 
ConAgra.
    C. No later than seven (7) calendar days after the entry of this 
Final Judgment, Defendants shall distribute a copy of this Final 
Judgment and the Competitive Impact Statement to each of their 
employees with responsibility for wheat sales or flour sales.
    D. Defendants shall distribute a copy of this Final Judgment and 
related Competitive Impact Statement to any person who succeeds to a 
position described in Paragraph VIII(C) within thirty (30) days of that 
succession.
    E. Defendants shall annually furnish to each person designated in 
Paragraphs VIII(C) and VIII(D) a description and summary of the meaning 
and requirements of Section VIII of this Final Judgment.
    F. Defendants shall report to the United States any violations of 
Section VIII (A) or VIII(B) of this Final Judgment.

IX. FINANCING

    Defendants shall not finance all or any part of any purchase made 
pursuant to Section IV or V of this Final Judgment.

X. HOLD SEPARATE

    Until the divestitures required by this Final Judgment have been 
accomplished, Defendants shall take all steps necessary to comply with 
the Hold Separate Stipulation and Order entered by this Court. 
Defendants shall take no action that would jeopardize the divestitures 
ordered by this Court.

XI. AFFIDAVITS

    A. Within twenty (20) calendar days of the filing of the Complaint 
in this matter, Defendants shall deliver to the United States an 
affidavit that describes in reasonable detail all actions Defendants 
have taken and all steps Defendants have implemented on an ongoing 
basis to comply with Section X of this Final Judgment. Defendants shall 
deliver to the United States an affidavit describing any changes to the 
efforts and actions outlined in Defendants' earlier affidavits filed 
pursuant to this Section within fifteen (15) calendar days after the 
change is implemented.
    B. Defendants shall keep all records of all efforts made to 
preserve and divest the Divestiture Assets until one year after such 
divestiture has been completed.

XII. COMPLIANCE INSPECTION

    A. For the purposes of determining or securing compliance with this 
Final Judgment, or of any related orders such as the Hold Separate 
Stipulation and Order, or of determining whether the Final Judgment 
should be modified or vacated, and subject to any legally recognized 
privilege, from time to time authorized representatives of the United 
States Department of Justice, including consultants and other persons 
retained by the United States, shall, upon written request of an 
authorized representative of the Assistant Attorney General in charge 
of the Antitrust Division, and on reasonable notice to Defendants, be 
permitted:
    1. access during Defendants' office hours to inspect and copy, or 
at the option of the United States, to require Defendants to provide 
hard copy or electronic copies of, all books, ledgers, accounts, 
records, data, and documents in the possession, custody, or control of

[[Page 30896]]

Defendants, relating to any matters contained in this Final Judgment; 
and
    2. to interview, either informally or on the record, Defendants' 
officers, employees, or agents, who may have their individual counsel 
present, regarding such matters. The interviews shall be subject to the 
reasonable convenience of the interviewee and without restraint or 
interference by Defendants.
    B. Upon the written request of an authorized representative of the 
Assistant Attorney General in charge of the Antitrust Division, 
Defendants shall submit written reports or responses to written 
interrogatories, under oath if requested, relating to any of the 
matters contained in this Final Judgment as may be requested.
    C. No information or documents obtained by the means provided in 
this Section shall be divulged by the United States to any person other 
than an authorized representative of the executive branch of the United 
States, except in the course of legal proceedings to which the United 
States is a party (including grand jury proceedings), for the purpose 
of securing compliance with this Final Judgment, or as otherwise 
required by law.
    D. If, at the time information or documents are furnished by 
Defendants to the United States, Defendants represent and identify in 
writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(1)(G) of the 
Federal Rules of Civil Procedure, and Defendants mark each pertinent 
page of such material, ``Subject to claim of protection under Rule 
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United 
States shall give Defendants ten (10) calendar days notice prior to 
divulging such material in any legal proceeding (other than a grand 
jury proceeding).

XIII. NO REACQUISITION

    Defendants may not reacquire any part of the Divestiture Assets 
during the term of this Final Judgment, other than incidental purchases 
of finished goods, raw materials, spare parts, or other equipment 
offered by the Acquirer in the ordinary course of business.

XIV. RETENTION OF JURISDICTION

    This Court retains jurisdiction to enable any party to this Final 
Judgment to apply to this Court at any time for further orders and 
directions as may be necessary or appropriate to carry out or construe 
this Final Judgment, to modify any of its provisions, to enforce 
compliance, and to punish violations of its provisions.

XV. EXPIRATION OF FINAL JUDGMENT

    Unless this Court grants an extension, this Final Judgment shall 
expire ten (10) years from the date of its entry.

XVI. PUBLIC INTEREST DETERMINATION

    Entry of this Final Judgment is in the public interest. The parties 
have complied with the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec.  16, including making available to the 
public copies of this Final Judgment, the Competitive Impact Statement, 
and any comments thereon and the United States's responses to comments. 
Based upon the record before the Court, which includes the Competitive 
Impact Statement and any comments and responses to comments filed with 
the Court, entry of this Final Judgment is in the public interest.

Date:--------

    Court approval subject to procedures of Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec.  16

-----------------------------------------------------------------------

United States District Judge

SCHEDULE A

    1. ConAgra's ownership and leasehold interest in each of the 
following properties:
    a. New Prague
    i. The property at 100 2nd Avenue SW., New Prague, Minnesota 56071-
2314;
    ii. 2.46 acres of real property at 302 Second Street Northwest, New 
Prague, Minnesota pursuant to Lease Agreement, effective as of 
September 1, 2012, by and between ConAgra Foods, Inc. and City of New 
Prague, Minnesota;
    iii. Lease of Property, dated June 1, 2001, by and between Union 
Pacific Railroad Company and ConAgra Foods, Inc.;
    iv. Track Lease Agreement, dated March 1, 1989, by and between 
Union Pacific Railroad Company (as assignee of Chicago and North 
Western Transportation Company) and ConAgra Flour Milling Company;
    b. Oakland
    i. The property at 2201 East \7th\ Street, Oakland, California 
94606-5301;
    ii. The property at 401 Kennedy Street, Oakland, California 94606;
    iii. The agreement for Service from Track of Railroad, dated July 
26, 1991, by and between Southern Pacific Transportation Company and 
ConAgra, Inc.;
    c. Saginaw
    i. The property at 221 Fairmount Street, Saginaw, Texas 94606;
    ii. The property at 221 South Fairmount Street, Saginaw, Texas 
76179;
    iii. The property at 220 South Fairmount Street, Saginaw, Texas 
76179 (maintenance office that includes the machine shop and spare 
parts);
    2. Horizon's ownership and leasehold interest in each of the 
following properties in Los Angeles, California:
    a. Parcel 1 of Parcel Map NO 23131, in the City of Commerce, in the 
County of Los Angeles, State of California, as per map filed in Book 
276 Pages 33-36 inclusive of Parcel Maps, in the Office of the County 
Recorder of said county;
    i. Except therefrom all coal, oil, and other minerals, without the 
right to use any surface thereof, in and under that portion of said 
land lying within the lands described therein, as reserved by Las Vegas 
Land and Water Company, in deed recorded August 16, 1944 as instrument 
no. 15;
    ii. Also excepting therefrom all minerals and minerals rights of 
every kind and nature, including oil and gas rights, without the right 
to enter upon the surface thereof, in and under that portion of said 
land lying within the lands described therein, as reserved by Union 
Pacific Railway Company, in deed recorded September 30, 1947 as 
instrument no. 278;
    b. A perpetual easement for ingress and egress as established and 
more particularly described in that certain document entitled 
``Reciprocal Easement Agreement for Driveway'' recorded May 23, 1980 as 
instrument no. 80-511791, of official records;
    c. The Industry Track Contract between Union Pacific Railroad 
Company and Cargill, Incorporated, dated May 10, 2005;
    d. The Sublease Agreement between Horizon Milling, LLC and Lowey 
Enterprises d/b/a Sunrise Produce, dated August 16, 2004;
    e. The License Agreement between Horizon Milling LLC and 5469 
Ferguson Drive, LLC (``Licensor'') allowing Horizon Mill's employees to 
park on a portion of Licensor's property.
    3. For each property listed in 1(a)-(c) and 2 above and for the 
mill on that property,
    a. all tangible assets (leased or owned) used at or for the 
operation or maintenance of the mill, including, but not limited to, 
all real property and improvements; machinery; equipment; hardware; 
fixtures (including production fixtures); computer hardware, other 
tangible information technology assets; furniture; laboratories or 
other assets used to test or evaluate wheat or flour; equipment or 
buildings used for the storage, offloading, or

[[Page 30897]]

onloading of wheat, flour, or millfeed; supplies; materials; vehicles; 
and spare parts in respect of any of the foregoing;
    b. all improvements, fixed assets, and fixtures pertaining the mill 
or any other facility on the real property described in 1 (a)-(c) or 2 
above, and for any real property on which any facility is located that 
is used in connection with the operation or maintenance of the mill, or 
for any real property used for wheat that will be processed at the mill 
or for flour, millfeed, or any other product produced at the mill;
    c. all inventories, ingredients, raw materials, works-in-progress, 
finished goods, supplies, stock, parts, packaging materials and other 
accessories related thereto, including wheat or other ingredients that 
are in transit to the mill or flour, millfeed, or other products 
produced at the mill that is in transit to customers;
    d. all real property and other legal rights possessed by Defendants 
relating to the use, control or operation of the mill, for elevators, 
storage, offloading or onloading or other facilities used for wheat to 
be processed by the mill or for flour, millfeed, or any other product 
produced at the mill, whether located on the same land as the mill or 
not, including but not limited to, fee simple ownership rights, 
easements and all other real property rights for land, improvements, 
and fixtures; leasehold and rental rights for facilities that are 
leased or rented, including all renewal or option rights; personal 
property ownership rights for equipment and other personal property; 
and contract rights with respect thereto;
    e. all real property and other legal rights possessed by Defendants 
and not described in 3(d) above, relating to the real property 
described in 1(a)-(c) or 2 above, or any building thereon, including 
but not limited to, fee simple ownership rights, easements and all 
other real property rights for land, improvements, and fixtures; 
leasehold and rental rights for facilities that are leased or rented, 
including all renewal or option rights; personal property ownership 
rights for equipment and other personal property; and contract rights 
with respect thereto;
    f. all assets not otherwise described in 3 (a)-(e) above that 
relate to the transportation of wheat to the mill, or flour, millfeed, 
or any other product from the mill, including, but not limited to, 
leases or rights to use rail-to-truck transfer facilities, or leases or 
ownership interests in rail spurs or rail lines;
    g. all business records relating to operation of the mill located 
on the property, to transportation of wheat, flour, millfeed, or any 
other product produced at the mill, to the purchase of wheat, or to the 
sale of flour, millfeed, or any other product produced at the mill, or 
to any legal right in the real property described in 1 (a)-(c) or 2 
above and any building affixed thereto, including, but not limited to, 
maintenance records, financial records, accounting and credit records, 
leases, correspondence, tax records, governmental licenses and permits, 
bid or quote records, customer lists, customer communications, customer 
contracts, supplier contracts, service agreements, operations records, 
research and development records, testing records, non-employee 
specific health, environment and safety records, equipment, repair and 
performance records, training records, and all manuals and technical 
information Defendants provide to their employees, customers, 
suppliers, agents or licensees; and
    4. All intangible assets that are used to operate the mill or any 
facility located on the real property described in 1(a)-(c) or 2 above, 
to operate, maintain, or repair any of the equipment in the mill or in 
any facility located on the real property described in 1(a)-(c), or 2 
above, including, but not limited to, contractual rights (to the extent 
assignable) relating to energy, packaging, transportation, purchases of 
wheat or other materials for processing at the mill, sales of flour, 
millfeed or other products produced at the mill, including but not 
limited to, open contracts or orders for the purchase of wheat that 
have been assigned to the mill and open contracts or orders for the 
sale of flour, millfeed or other products produced at the mill that 
have been assigned to the mill; rights to use know-how, trade secrets, 
patents, licenses, sublicenses and other intellectual property in 
connection with the Divested Assets, and any assigned trademarks; 
technical information; computer software and related documentation; 
blueprints; specifications for materials; specifications provided by 
customers for flour, millfeed or other products produced at the mill; 
specifications for parts and devices; safety procedures; and quality 
assurance and control procedures.
    To the extent transference of any contract, lease or other rights 
described above requires the consent of the other party, Defendants 
shall use their best efforts to obtain that consent.

[FR Doc. 2014-12397 Filed 5-28-14; 8:45 am]
BILLING CODE 4410-11-P