United States, State of Illinois, State of Iowa, and State of Missouri v. Tyson Foods, Inc. and The Hillshire Brands Company; Proposed Final Judgment and Competitive Impact Statement, 52751-52762 [2014-21102]

Download as PDF mstockstill on DSK4VPTVN1PROD with NOTICES Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices this matter can be obtained by contacting the Commission’s TDD terminal on 202–205–1810. SUPPLEMENTARY INFORMATION: The Commission instituted this investigation on March 15, 2013, based on a complaint filed by Tela Innovations, Inc., of Los Gatos, California (‘‘Tela’’). 78 FR 16533 (March 15, 2013). The complaint alleged violations of section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), in the importation into the United States, the sale for importation, and the sale within the United States after importation of certain integrated circuit devices and products containing the same by reason of infringement of various claims of U.S. Patent Nos. 8,264,049; 8,264,044; 8,258,550; 8,258,547; 8,217,428; 8,258,552; 8,030,689. The notice of investigation named the following entities as respondents: Motorola Mobility LLC, of Libertyville, Illinois (‘‘Motorola’’); Pantech Co., Ltd., of the Republic of Korea; Pantech Wireless, Inc., of Atlanta, Georgia (collectively, ‘‘Pantech’’); and Remaining Respondents. The Office of Unfair Import Investigations is a party to the investigation. On July 21, 2014, the ALJ issued IDs (Order Nos. 68 and 69), terminating the investigation as to Motorola and Pantech based upon settlement and consent order stipulations, respectively. The Commission determined not to review. On July 31, 2014, Tela and Remaining Respondents filed a joint unopposed motion to terminate the investigation as to Remaining Respondents based upon (1) settlement under 19 CFR 210.21(b) or (2) withdrawal of the complaint under 19 CFR 210.21(a). On August 1, 2014, the Commission investigative attorney filed a response in support of the motion to terminate the investigation. On August 1, 2014, the ALJ issued the subject ID, granting the motion to terminate the investigation as to Remaining Respondents. The ALJ found that the parties complied with the requirements of Commission rules 210.21(a)(1) and 210.21(b)(1) (19 CFR 210.21(a)(1), 210.21(b)(1)), and that terminating Remaining Respondents from the investigation would not be contrary to the public interest. None of the parties petitioned for review of the ID. The Commission has determined not to review the ID and terminates Remaining Respondents under 19 CFR 210.21(a)(1), withdrawal of the complaint. This terminates the investigation in its entirety. The authority for the Commission’s determination is contained in section VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission’s Rules of Practice and Procedure (19 CFR part 210). By order of the Commission. Issued: August 28, 2014. Lisa R. Barton, Secretary to the Commission. [FR Doc. 2014–20935 Filed 9–3–14; 8:45 am] BILLING CODE 7020–02–P DEPARTMENT OF JUSTICE Notice of Lodging of Proposed Consent Decree Under the Safe Drinking Water Act, the Clean Water Act and the Resource Conservation and Recovery Act On August 28, 2014, the Department of Justice lodged with the United States District Court for the District of Nebraska a proposed Consent Decree in United States v. Omaha Tribe of Nebraska and Omaha Tribal Utility Commission, Civil Action No. 8:14–cv– 00255. This civil action asserts claims for civil penalties and injunctive relief against the Omaha Tribe of Nebraska and the Omaha Tribal Utility Commission (‘‘Defendants’’) for alleged violations of the Safe Drinking Water Act, 42 U.S.C. Sec 300i (‘‘SDWA’’); the Clean Water Act, 33 U.S.C 1319(a), (b) & (d) (‘‘CWA’’); and the Resource Conservation and Recovery Act, 42 U.S.C. 6973(b) (‘‘RCRA’’) at Defendants’ Macy Public Water System, Macy Public Wastewater Treatment Facility, and Mother Earth Recycling Center (collectively ‘‘Utilities’’) serving the towns of Macy and Walthill, Nebraska on the Omaha Reservation. The United States seeks injunctive relief and civil penalties intended to address Defendants’ failure to comply with a March 2011 Environmental Protection Agency Administrative Order on Consent alleging longstanding violations of the SDWA, CWA, and RCRA at the Defendants’ Utilities. To resolve the United States’ claims Defendants will pay a civil penalty of $2,000 and implement a number of corrective measures to build the Defendants’ financial, managerial and technical capacity to operate and maintain the Utilities in compliance with statutory and regulatory requirements. The publication of this notice opens a period for public comment on the Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural PO 00000 Frm 00127 Fmt 4703 Sfmt 4703 52751 Resources Division, and should refer to United States v. Omaha Tribe of Nebraska and Omaha Tribal Utility Commission, Civil Action No. 8:14–cv– 00255, D.J. Ref. No. 90–5–1–1–10496. Commenters may request an opportunity for a public meeting in the affected area, in accordance with Section 7003(d) of the Resource Conservation and Recovery Act, 42 U.S.C. 6973. All comments must be submitted no later than thirty (30) days after the publication date of this notice. Comments may be submitted either by email or by mail: To submit comments: Send them to: By email .... pubcomment-ees.enrd@ usdoj.gov. Assistant Attorney General U.S. DOJ–ENRD P.O. Box 7611 Washington, DC 20044–7611. By mail ...... During the public comment period, Consent Decree may be examined and downloaded at this Justice Department Web site: https://www.usdoj.gov/enrd/ Consent_Decrees.html. We will provide a paper copy of the Consent Decree upon written request and payment of reproduction costs. Please mail your request and payment to: Consent Decree Library, U.S. DOJ–ENRD, P.O. Box 7611, Washington, DC 20044–7611. Please enclose a check or money order for $17.25 (25 cents per page reproduction cost) payable to the United States Treasury. Maureen M. Katz, Assistant Section Chief, Environmental Enforcement Section, Environment and Natural Resources Division. [FR Doc. 2014–21006 Filed 9–3–14; 8:45 am] BILLING CODE 4410–15–P DEPARTMENT OF JUSTICE Antitrust Division United States, State of Illinois, State of Iowa, and State of Missouri v. Tyson Foods, Inc. and The Hillshire Brands Company; 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, Stipulation and Competitive Impact Statement have been filed with the United States District Court for the District of Columbia in United States of America, State of Illinois, State of Iowa, and State of Missouri v. Tyson Foods, Inc. and E:\FR\FM\04SEN1.SGM 04SEN1 52752 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices The Hillshire Brands Company, Civil Action No. 1:14–cv–01474–JEB. On August 27, 2014, the United States and the States of Illinois, Iowa, and Missouri filed a Complaint alleging that the proposed acquisition by Tyson Foods, Inc. (‘‘Tyson’’) of The Hillshire Brands Company (‘‘Hillshire’’) would violate Section 7 of the Clayton Act, 15 U.S.C. 18. The proposed Final Judgment, filed the same time as the Complaint, requires Tyson to divest Heinold Hog Markets, its division that purchases sows. 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 William H. Stallings, Chief, Transportation, Energy, and Agriculture Section, Antitrust Division, Department of Justice, Washington, DC 20530, (telephone: 202–514–9323). Patricia A. Brink, Director of Civil Enforcement. mstockstill on DSK4VPTVN1PROD with NOTICES United States District Court for the District of Columbia United States of America, U.S. Department of Justice, Antitrust Division, 450 Fifth Street NW., Suite 8000, Washington, D.C. 20530, State of Illinois, by its Attorney General, Lisa Madigan, 100 West Randolph Street, Chicago, Illinois 60601, State of Iowa, Iowa Department of Justice, Special Litigation Division, Hoover Office Building-Second Floor, 1305 East Walnut Street, Des Moines, Iowa 50319, and State of Missouri, Office of the Attorney General, Consumer Protection Division, Post Office Box 899, Jefferson City, Missouri 65102, Plaintiffs, v. Tyson Foods, Inc., 2200 Don Tyson Parkway, Springdale, Arkansas 72762–6999, and The Hillshire Brands Company, 400 South Jefferson Street, Chicago, Illinois 60607, Defendants. Case: 1:14–cv–01474–JEB Judge: Hon. James Boasberg VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 Filed: 08/27/2014 the United States in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. Complaint The United States of America, acting under the direction of the Attorney General of the United States, and the States of Illinois, Iowa, and Missouri (collectively, ‘‘Plaintiffs’’) bring this civil antitrust action to enjoin the proposed acquisition by Tyson Foods, Inc. (‘‘Tyson’’) of The Hillshire Brands Company (‘‘Hillshire’’) (collectively, ‘‘Defendants’’) and to obtain other equitable relief. Plaintiffs allege as follows: I. Nature of the Action 1. Tyson and Hillshire compete against each other and against others to procure sows from farmers in the United States. Farmers earn approximately $700 million annually from sales of sows and rely on competition among purchasers to ensure competitive prices. Tyson’s proposed acquisition of Hillshire would eliminate head-to-head competition between the companies and create a firm that would account for over a third of all sows purchased from farmers in the United States. 2. Sows are female pigs that are raised for the purpose of breeding hogs. At the end of their productive breeding lives, sows are sold for slaughter. Packers such as Hillshire use the meat from sows in the production of pork sausage. In contrast, hogs are swine raised solely for the purpose of slaughter; their meat is typically used for pork products other than sausage. 3. Tyson, through its Heinold Hog Markets division (‘‘Heinold’’), purchases sows from farmers and re-sells them to packers, including Hillshire. Tyson has buying stations located throughout the Midwest that procure sows directly from local farmers, sort the sows according to different characteristics, and ship them to packers according to each packer’s particular requirements. Packers overwhelmingly use marketers such as Heinold to procure sows rather than purchase directly from farmers due to the efficiencies marketers offer in terms of sorting, shipping, and other services. Hillshire is one of the few packers that purchases sows directly from farmers; as such, it competes directly against Heinold to procure sows from farmers. 4. On July 1, 2014, Tyson and Hillshire entered into a definitive agreement under which Tyson will acquire Hillshire. Unless enjoined, the proposed acquisition is likely to lessen competition substantially in the market for the purchase of sows from farmers in PO 00000 Frm 00128 Fmt 4703 Sfmt 4703 II. Jurisdiction and Venue 5. The United States brings this action under Section 15 of the Clayton Act, 15 U.S.C. § 25, and the Plaintiff States bring this action under Section 16 of the Clayton Act, 15 U.S.C. § 26, to prevent and restrain Defendants from violating Section 7 of the Clayton Act, 15 U.S.C. § 18. The Plaintiff States, by and through their respective Attorneys General, bring this action as parens patriae on behalf of the citizens, general welfare, and economy of each of their states. 6. Defendants are engaged in interstate commerce and in activities substantially affecting interstate commerce. Tyson, through Heinold, and Hillshire purchase sows from farmers located throughout the United States. This Court has subject matter jurisdiction over this action and jurisdiction over the parties pursuant to 15 U.S.C. § 25, and 28 U.S.C. §§ 1331, 1337(a), and 1345. 7. Defendants have consented to venue and personal jurisdiction in this District. III. Defendants and the Proposed Transaction 8. Tyson Foods, Inc. is a Delaware corporation with its principal place of business in Springdale, Arkansas. In 2013, Tyson had total revenues of approximately $34.4 billion. Tyson is one of the world’s largest meat companies. It produces, distributes, and markets chicken, beef, pork, and prepared food products. Tyson Hog Markets, Inc., a subsidiary of Tyson and Tyson Fresh Meats, Inc., purchases hogs for Tyson’s hog processing facilities. Tyson does not process sows. Tyson does, however, buy and resell sows through Heinold. In 2013, Heinold had overall revenues of approximately $270 million. 9. The Hillshire Brands Company is a Maryland corporation with its principal place of business in Chicago, Illinois. Hillshire is a manufacturer and marketer of brand name food products for the retail and foodservice markets, including sausage, hot dogs, and luncheon meats. Its brand names include Jimmy Dean, Ball Park, and Hillshire Farm. Hillshire’s total revenues were approximately $3.9 billion for the year ended June 29, 2013. 10. On July 1, 2014, Tyson and Hillshire entered into a definitive agreement for the acquisition by Tyson E:\FR\FM\04SEN1.SGM 04SEN1 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices of Hillshire. On July 16, 2014, Tyson commenced a tender offer to purchase all of Hillshire’s outstanding shares. The tender offer is conditioned on the valid tendering, without a valid withdrawal, of at least two-thirds of Hillshire’s outstanding stock prior to expiration of the offer. As of August 12, over 70% of Hillshire’s outstanding shares had been validly tendered and not validly withdrawn. IV. mstockstill on DSK4VPTVN1PROD with NOTICES Trade and Commerce A. The Sow Packing Industry 11. Sausage producers primarily buy sows from marketers such as Heinold. Marketers purchase sows from individual farmers and assemble truck loads (with approximately 100 sows per load) for delivery to sausage plants. Marketers utilize buying stations to procure sows from farmers. A buying station includes space for offloading and loading sows, pens for holding the sows, scales, and administrative space. Sows are usually kept at a buying station no longer than three days and may be shipped out to a slaughterer the same day they arrive from a farm. 12. Larger marketers have multiple buying stations. Heinold operates eight buying stations located in Atkinson, Illinois; Burlington, Indiana; Randall and Sioux City, Iowa; Jones, Michigan; Windom, Minnesota; Monroe City, Missouri, and St. Paul, Nebraska. Heinold buys sows from more than 2,400 farmers located throughout the United States. In 2013, Heinold purchased about 660,000 sows from farmers in the United States, paying more than $150 million to farmers. 13. Hillshire slaughters sows and produces sausage at a facility in Newbern, Tennessee. Whereas most other sausage producers purchase nearly all of their sows from marketers, Hillshire is unique among major sausage manufacturers in that it purchases over half of its sows directly from farmers. The sows that Hillshire purchases from farmers are usually transported directly by truck from the farm to Hillshire’s Tennessee facility. Hillshire purchases sows from approximately 100 farmers located throughout the United States. In 2013, it purchased more than 250,000 sows from farmers in the United States, paying approximately $80 million to farmers. 14. The frequency and number of a particular farmer’s sales of sows depends on the size of its breeding operations. Larger operations sell sows every week; smaller operations sell sows much less frequently. Some operations are of a sufficient size to be able to sell VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 sows by the truckload whereas many farms sell lots of smaller sizes. B. The Relevant Market 15. There are no economic uses for slaughtered sows other than for the production of pork sausage. It is highly unlikely that a small decrease in the prices paid for sows would be rendered unprofitable by a switch of the sale of sows to other purchasers for any other use. 16. The purchase of sows from farmers is a relevant antitrust product market. In part because income from sow sales represents a small percentage of the overall revenues of a hog breeding operation, a small decrease in the prices farmers receive for sows typically would not affect farmers’ decisions about when to slaughter sows, the size of their breeding operations, or whether to abandon their investments in hog breeding altogether. Although the sale of sows constitutes a small percentage of overall revenues, farmers rely on this source of income as an important contribution to their earnings. 17. Hog breeding operations are concentrated in the central area of the United States, including Iowa, Illinois, and Missouri, and in North Carolina. All else equal, farmers prefer to transport sows as short a distance as possible, unless the price that the farmer receives justifies shipping the sows farther. For instance, Hillshire sometimes fully compensates the farmer for transportation costs, which makes it economical for farmers located hundreds of miles away from the Hillshire plant to sell to Hillshire. Sows are commonly shipped throughout the central area of the United States where the purchasing facilities of the merging parties are located and where a major portion of sow sales and slaughter take place. The overwhelming majority of sow purchases occur within this region. As sows are also shipped even farther distances to slaughter facilities throughout the nation, the United States is the outer bounds of a relevant geographic market. 18. Thus, the purchase of sows from farmers in the United States is a relevant market (i.e., a line of commerce and a section of the country) under Section 7 of the Clayton Act, 15 U.S.C. § 18. C. Anticompetitive Effects 19. The acquisition of Hillshire by Tyson will combine two of the major purchasers of sows from farmers in the United States and create a company that would account for approximately 35% of all purchases in this market. Using the Herfindahl-Hirschman Index (HHI), a standard measure of concentration, the PO 00000 Frm 00129 Fmt 4703 Sfmt 4703 52753 post-acquisition HHI would increase by more than 500 points, resulting in a post-acquisition HHI of approximately 2100. 20. Farmers have benefited from competition between Tyson and Hillshire in a variety of respects. Farmers track offering prices from sow purchasers. For many farmers, at particular points in time, the merging parties constitute their two best alternatives. The purchasing facilities of the merging parties are two of a small number of potential buyers from whom farmers seek or receive quotes. As the transaction eliminates a significant competing bidder, bidding is likely to be less aggressive and farmers are likely to receive lower prices for sows. As the prices offered decrease, farmers may ship sows to more distant purchasers. This additional shipping time and cost constitute an economic inefficiency that would follow from the elimination of competition between Hillshire and Tyson. 21. Tyson’s acquisition of Hillshire would eliminate actual and potential competition between Heinold Hog Markets and Hillshire, leaving farmers with fewer outlets for their sows and lower prices in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. D. Absence of Countervailing Factors 22. Successful entry or repositioning into the market for the purchase of sows from farmers would not be timely, likely, or sufficient to deter the anticompetitive effects resulting from this transaction. Slaughterers that do not currently purchase sows directly from farmers are unlikely to begin to do so because they value the sorting and weighing services performed by marketers at their buying stations. Entry by new marketers or expansion by existing marketers sufficient to replace the market impact of the loss of competition resulting from the transaction is also unlikely. The process of locating and acquiring land, obtaining permits, and constructing buying stations would require an extensive period of time and would be unlikely to occur in response to anticompetitive price decreases resulting from the merger. V. Violation Alleged 23. Plaintiffs hereby incorporate paragraphs 1 through 22. 24. Unless enjoined, Tyson’s proposed acquisition of Hillshire is likely to substantially lessen competition and restrain trade in the purchase of sows from farmers in the E:\FR\FM\04SEN1.SGM 04SEN1 52754 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices United States in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18, in the following ways: a. actual and potential competition between Tyson and Hillshire in the purchase of sows from farmers in the United States will be eliminated; b. competition in the purchase of sows from farmers in the United States will be substantially lessened; and c. prices paid to farmers in the United States for sows will likely decrease. VI. mstockstill on DSK4VPTVN1PROD with NOTICES Request for Relief 25. Plaintiffs request that: a. Tyson’s proposed acquisition of Hillshire be adjudged and decreed to be unlawful and in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18; b. Defendants and all persons acting on their behalf be preliminarily and permanently enjoined and restrained from consummating the proposed transaction or from entering into or carrying out any contract, agreement, plan, or understanding, the effect of which would be to combine Tyson and Hillshire; c. Plaintiffs be awarded its costs for this action; and d. Plaintiffs receive such other and further relief as the Court deems just and proper. Dated this 27th day of August, 2014. Respectfully submitted, For Plaintiff United States: /s/ lllllllllllllllllll William J. Baer (D.C. Bar #324723) Assistant Attorney General for Antitrust /s/ lllllllllllllllllll David I. Gelfand (D.C. BAR #416596) Deputy Assistant Attorney General /s/ lllllllllllllllllll Patricia A. Brink Director of Civil Enforcement /s/ lllllllllllllllllll William H. Stallings (D.C. BAR #444924) Chief Transportation, Energy & Agriculture Section /s/ lllllllllllllllllll Caroline E. Laise Assistant Chief Transportation, Energy & Agriculture Section /s/ lllllllllllllllllll Angela L. Hughes (D.C. Bar #303420)*, Katherine A. Celeste, Jill A. Ptacek, Attorneys Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8000, Washington, DC 20530, Telephone: (202) 307–6410, Facsimile: (202) 307–2784, E-mail: Angela.Hughes@usdoj.gov Attorneys for the United States *Attorney of Record For Plaintiff State of Illinois Lisa Madigan Attorney General Cara Hendrickson VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 Chief, Public Interest Division Robert Pratt Chief, Antitrust Bureau Public Interest Division /s/ lllllllllllllllllll Blake Harrop Senior Assistant Attorney General, Illinois Bar No. 99000, 100 West Randolph Street, Chicago, Illinois 60601, Ph: 312–814–1004, Fax: 312–814–4209, bharrop@atg.state.il.us For Plaintiff State of Iowa: Thomas J. Miller Attorney General /s/ lllllllllllllllllll Layne M. Lindebak (IA Bar AT0004755) Assistant Attorney General, Special Litigation Division, Hoover Office Building— Second Floor, 1305 East Walnut Street, Des Moines, IA 50319, Tel: (515) 281–7054, Fax: (515) 281–4902; Layne.Lindebak@iowa.com. Dated: August 26, 2014 For Plaintiff State of Missouri: Chris Koster Attorney General /s/ lllllllllllllllllll Anne E. Schneider Assistant Attorney General/Antitrust Counsel Kyle A. Poelker Assistant Attorney General Office of the Missouri Attorney General, P.O. Box 899, Jefferson City, MO 65102, Phone: (573) 751–7445, Fax: (573) 751–2041, Email: Anne.Schneider@ago.mo.gov, Email: Kyle.Poelker@ago.mo.gov United States District Court for the District of Columbia United States of America, State of Illinois, State of Iowa, and State of Missouri, Plaintiffs, v. Tyson Foods, Inc., and The Hillshire Brands Company, Defendants. Case: 1:14-cv-01474-JEB Judge: Hon. James Boasberg Filed: 08/27/2014 Competitive Impact Statement Plaintiff United States of America, pursuant to Section 2(b) of the Antitrust Procedures and Penalties Act (‘‘APPA’’ or ‘‘Tunney Act’’), 15 U.S.C. § 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 Defendant Tyson Foods, Inc. (‘‘Tyson’’) and Defendant The Hillshire Brands Company (‘‘Hillshire’’) (collectively, ‘‘Defendants’’) entered into an agreement on July 1, 2014, pursuant to which Tyson will acquire all of the outstanding shares of Hillshire. The allcash transaction, which includes Hillshire’s outstanding net debt, is valued at approximately $8.55 billion. The United States filed a civil antitrust Certificate of Service Complaint on August 27, 2014, seeking to enjoin the proposed acquisition. The I, Angela L. Hughes, hereby certify that on August 27, 2014, I caused a copy Complaint alleges that the likely effect of this acquisition would be to lessen of the foregoing Complaint, Proposed competition substantially in the market Final Judgment, Hold Separate for the purchase of sows from farmers in Stipulation and Order, Competitive the United States in violation of Section Impact Statement, and United States’ 7 of the Clayton Act, 15 U.S.C. § 18. Explanation of Consent Decree At the same time the Complaint was Procedures to be served on Defendants filed, Plaintiffs also filed a Hold Tyson Foods, Inc. and The Hillshire Separate Stipulation and Order (‘‘Hold Brands Company by electronic mail to Separate’’) and proposed Final their duly authorized legal Judgment, which are designed to representatives of the Defendants, as eliminate the anticompetitive effects of follows: the acquisition. Under the proposed For Defendants Final Judgment, which is explained Tyson Foods, Inc. more fully below, Defendants are to Ronan P. Harty divest Tyson’s sow purchasing business, Davis Polk & Wardwell LLP, 450 Lexington also known as Heinold Hog Markets (the Avenue, New York, NY 10017, Telephone: ‘‘Divestiture Assets’’). Under the terms (212) 450–4870, Facsimile: (202) 701–5870, of the Hold Separate, the Defendants Email: ronan.harty@DavisPolk.com will take certain steps to ensure that The Hillshire Brands Company Tyson Hog Markets, Inc., a subsidiary of Clifford H. Aronson Tyson that includes the Divestiture (D.C. Bar #335182) Skadden, Arps, Slate, Meagher & Flom LLP, Assets, is operated as a competitively Four Times Square, New York, NY 10036– independent, economically viable and 6522, Telephone: 212.735.2644, Facsimile: ongoing business concern that will 917.777.2644, Email: clifford.aronson@ remain independent of Hillshire’s sow skadden.com purchasing operation and will be /s/ lllllllllllllllllll uninfluenced by the consummation of Angela L Hughes* the acquisition, and that competition Attorney, Antitrust Division, U.S. Department between Tyson and Hillshire in the of Justice, 450 Fifth Street, N.W., Suite 8000, purchase of sows from farmers is Washington, DC 20530, Telephone: (202) maintained during the pendency of the 307–6410, Facsimile: (202) 307–2784, Email: ordered divestiture. angela.hughes@usdoj.gov PO 00000 Frm 00130 Fmt 4703 Sfmt 4703 E:\FR\FM\04SEN1.SGM 04SEN1 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices Plaintiffs and Defendants have stipulated that the proposed Final Judgment may be entered after compliance with the APPA. 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. II. Description of the Events Giving Rise to the Alleged Violation mstockstill on DSK4VPTVN1PROD with NOTICES A. The Defendants and the Proposed Transaction Defendant Tyson is a Delaware corporation with its headquarters in Springdale, Arkansas. In 2013, Tyson had total revenues of approximately $34.4 billion. Tyson is one of the world’s largest meat companies, producing, distributing, and marketing chicken, beef, pork, and prepared foods. Tyson’s subsidiary Tyson Fresh Meats, Inc. is responsible for the purchase of hogs and cattle for Tyson’s processing facilities; hog purchases are handled by Tyson Hog Markets, Inc., a subsidiary of Tyson Fresh Meats. In addition to buying hogs for Tyson’s processing facilities, Tyson Hog Markets’ subsidiary Heinold Hog Markets (‘‘Heinold’’), buys and resells sows.1 In 2013, Heinold had revenues of approximately $270 million. Defendant Hillshire is a Maryland corporation headquartered in Chicago, Illinois. Hillshire is a manufacturer and marketer of brand name food products for the retail and foodservice markets, including sausage, hot dogs, and luncheon meats. Its brand names include Jimmy Dean, Ball Park, and Hillshire Farm. Hillshire’s total revenues were approximately $3.9 billion for the year ended June 29, 2013. On July 1, 2014, Tyson and Hillshire entered into a definitive agreement for the acquisition by Tyson of Hillshire. On July 16, 2014, Tyson commenced a tender offer to purchase all of Hillshire’s outstanding shares. The tender offer is conditioned on the valid tendering, without a valid withdrawal, of at least two-thirds of Hillshire’s outstanding stock prior to expiration of the offer. As of August 12, over 70% of Hillshire’s outstanding shares had been validly tendered and not validly withdrawn. 1 Sows are female hogs that have produced at least one litter and will no longer be used for breeding. Heinold also purchases boars and outs (runts or deformed hogs) from farmers. VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 B. Industry Background Sows are female pigs raised for the purpose of breeding hogs. Sows are sold for slaughter at the end of their productive breeding lives. Packers use the meat from sows in the production of pork sausage. In contrast, hogs are swine raised solely for the purpose of slaughter; their meat is typically used for pork products other than sausage. Sausage producers, other than Hillshire, primarily buy sows from marketers such as Heinold. Marketers purchase sows from individual farmers and assemble truck loads (with approximately 100 sows per load) for delivery to sausage plants. Marketers utilize buying stations to procure sows from farmers. The frequency and number of a particular farmer’s sales of sows depends on the size of its breeding operations. Larger operations sell sows every week; smaller operations sell sows much less frequently. Some operations are of a sufficient size to be able to sell sows by the truckload whereas many farms sell lots of smaller sizes. Heinold operates eight buying stations located in Atkinson, Illinois; Burlington, Indiana; Randall and Sioux City, Iowa; Jones, Michigan; Windom, Minnesota; Monroe City, Missouri, and St. Paul, Nebraska. Heinold buys sows from more than 2,400 farmers located throughout the United States. In 2013, Heinold purchased about 660,000 sows from farmers in the United States, paying more than $150 million to farmers. Hillshire slaughters sows and produces sausage at a facility in Newbern, Tennessee. Whereas most other sausage producers purchase nearly all of their sows from marketers, Hillshire is unique in that it purchases over half of its sows directly from farmers. The sows that Hillshire purchases from farmers are usually transported directly by truck from the farm to Hillshire’s Tennessee facility. Hillshire purchases sows from approximately 100 farmers located throughout the United States. In 2013, it purchased more than 250,000 sows from farmers in the United States, paying approximately $80 million to farmers. C. Relevant Markets There are no economic uses for slaughtered sows other than for the production of pork sausage. It is highly unlikely that a small decrease in the prices paid for sows would be rendered unprofitable by farmers switching to selling sows to other purchasers for any other uses. The purchase of sows from farmers is a relevant antitrust product market. In part because income from sow sales PO 00000 Frm 00131 Fmt 4703 Sfmt 4703 52755 represents a small percentage of the overall revenues of a hog breeding operation, a small decrease in the prices farmers receive for sows typically would not affect farmers’ decisions about when to slaughter sows, the size of their breeding operations, or whether to abandon their investments in hog breeding altogether. Although the sale of sows constitutes a small percentage of overall revenues, farmers rely on this source of income as an important contribution to their earnings. Hog breeding operations are concentrated in the central area of the United States, including Iowa, Illinois, and Missouri, and in North Carolina. All else equal, farmers prefer to transport sows as short a distance as possible, unless the price that the farmer receives justifies shipping the sows farther. For instance, Hillshire sometimes fully compensates the farmer for transportation costs, which makes it economical for farmers located hundreds of miles away from the Hillshire plant to sell to Hillshire. Sows are commonly shipped throughout the central area of the United States where the purchasing facilities of the merging parties are located and where a major portion of sow sales and slaughter take place. The overwhelming majority of sow purchases occur within this region. As sows are also shipped even farther distances to slaughter facilities throughout the nation, the United States is the outer bounds of a relevant geographic market. Thus, the purchase of sows from farmers in the United States is a relevant market (i.e., a line of commerce and a section of the country) under Section 7 of the Clayton Act, 15 U.S.C. § 18. D. Anticompetitive Effects of Tyson’s Acquisition of Hillshire The market for the purchase of sows from farmers is concentrated. The acquisition of Hillshire by Tyson will combine two of the major purchasers of sows from farmers in the United States and would create a company that accounts for approximately 35% of all purchases in this market. Using the Herfindahl-Hirschman Index, the postacquisition HHI would increase by more than 500 points, resulting in a postacquisition HHI of approximately 2100. Farmers have benefited from competition between Tyson and Hillshire in a variety of ways. Farmers track prices offered by sow purchasers. For many farmers, at particular points in time, the merging parties constitute their two best alternatives. The purchasing facilities of the merging parties are two of a small number of potential buyers from whom farmers E:\FR\FM\04SEN1.SGM 04SEN1 52756 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices seek or receive quotes. As the transaction eliminates a significant competing bidder, bidding is likely to be less aggressive and farmers are likely to receive lower prices for sows. As the prices offered decrease, farmers may need to ship sows to more distant purchasers. This additional shipping time and cost constitute an economic inefficiency that would follow from the elimination of competition between Hillshire and Tyson.2 Successful entry or repositioning into the market for the purchase of sows from farmers would not be timely, likely, or sufficient to deter the anticompetitive effects resulting from this transaction. Slaughterers that do not currently purchase sows directly from farmers are unlikely to begin to do so because they value the sorting and weighing services performed by marketers at their buying stations. Entry by new marketers or expansion by existing marketers sufficient to replace the market impact of the loss of competition resulting from the transaction is also unlikely. The process of locating and acquiring land, obtaining permits, and constructing buying stations would require an extensive period of time and would be unlikely to occur in response to anticompetitive price decreases resulting from the merger. Tyson’s acquisition of Hillshire would eliminate actual and potential competition between Tyson and Hillshire, leaving farmers with fewer outlets for their sows and lower prices in violation of Section 7 of the Clayton Act, 15 U.S.C. § 18. mstockstill on DSK4VPTVN1PROD with NOTICES III. Explanation of the Proposed Final Judgment The divestiture requirement of the proposed Final Judgment will eliminate the anticompetitive effects of the acquisition in the market for purchases of sows from U.S. farmers by establishing a new, independent, and economically viable competitor. The proposed Final Judgment requires the Defendants, within 90 days after the filing of the Complaint, or five days after notice of entry of the Final Judgment, whichever is later, to divest all of Heinold (‘‘the Divestiture Assets’’), which constitute all the assets Tyson currently uses to compete against Hillshire for sow purchases from U.S. farmers. Defendants must take all 2 Mergers of competing buyers can enhance market power on the buying side of a market, raising significant antitrust concerns. See U.S. Dep’t of Justice and Federal Trade Commission, Horizontal Merger Guidelines (2010), § 12. VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 reasonable steps necessary to accomplish the divestiture quickly and shall cooperate with prospective purchasers. The terms of the proposed Final Judgment require the Defendants to divest the Divestiture Assets within 90 days. If Defendants are unable to accomplish the divestiture within this period, the United States, after consultation with the Plaintiff States, may extend this period up to 60 days and shall notify the Court in such circumstances. A prompt divestiture has the benefits of restoring competition lost as a result of the acquisition and reducing the possibility that the value of the assets will be diminished. Section V(B) of the Hold Separate Stipulation and Order specifies that the Divestiture Assets will be maintained as a viable business and that Hillshire employees will not gain access to customer or supplier lists specific to the Divestiture Assets prior to divestiture. Section IV(B) of the proposed Final Judgment requires the Defendants to furnish information to prospective acquirers in an attempt to sell the divestiture assets. Section X of the proposed Final Judgment provides that the United States may appoint a Monitoring Trustee with the power and authority to investigate and report on the parties’ compliance with the terms of the Final Judgment and the Hold Separate during the pendency of the divestiture, including keeping Tyson Hog Markets separate from the sow purchasing operations of Hillshire. The Monitoring Trustee would not have any responsibility or obligation for the operation of the parties’ businesses. The Monitoring Trustee will serve at Defendants’ expense, on such terms and conditions as the United States approves, and Defendants must assist the trustee in fulfilling its obligations. The Monitoring Trustee will file monthly reports and will serve until the divestitures are complete. The Monitoring Trustee shall serve until the divestiture of all the Divestiture Assets is finalized pursuant to either Section IV or Section V of the Final Judgment. In the event that Defendants do not accomplish the divestiture within the periods prescribed in the proposed Final Judgment, Section V of the proposed Final Judgment provides that the Court will appoint a Divestiture Trustee selected by the United States to effect the sale of the Divestiture Assets. If a Divestiture Trustee is appointed, the proposed Final Judgment provides that Defendant Tyson will pay all costs and expenses of the Divestiture Trustee. The Divestiture Trustee’s commission will PO 00000 Frm 00132 Fmt 4703 Sfmt 4703 be structured so as to incentivize the Divestiture Trustee to complete the divestiture as quickly as possible while trying to obtain the highest possible price for the Divestiture Assets. After his or her appointment becomes effective, the Divestiture Trustee will file monthly reports with the Court and the United States which set forth his or her efforts to accomplish the divestiture. At the end of six (6) months, if the divestiture has not been accomplished, the Divestiture 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 Divestiture Trustee’s appointment. The divestiture provisions of the proposed Final Judgment will eliminate the anticompetitive effects of the acquisition in the market for the purchase of sows from U.S. farmers. IV. Remedies Available to Potential Private Litigants Section 4 of the Clayton Act, 15 U.S.C. § 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. § 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 Plaintiffs 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 E:\FR\FM\04SEN1.SGM 04SEN1 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices 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 United States 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: William H. Stallings, Chief, Transportation, Energy, and Agriculture Section, Antitrust Division, United States Department of Justice, 450 5th St. NW., Suite 8000, 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 Tyson’s acquisition of Hillshire. The United States is satisfied, however, that the divestiture of assets described in the proposed Final Judgment will preserve competition in the market for the purchase of sows from U.S. farmers. 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. mstockstill on DSK4VPTVN1PROD with NOTICES 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 sixtyday comment period, after which the court shall determine whether entry of the proposed Final Judgment ‘‘is in the public interest.’’ 15 U.S.C. § 16(e)(1). In making that determination, the court, in VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 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 including consideration of the public benefit, if any, to be derived from a determination of the issues at trial. 15 U.S.C. § 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 public interest standard under the Tunney Act); United States v. InBev N.V./S.A., No. 08–1965 (JR), 2009–2 Trade Cas. (CCH) ¶ 76,736, 2009 U.S. Dist. LEXIS 84787, 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.’’).3 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 3 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. § 16(e) (2004), with 15 U.S.C. § 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). PO 00000 Frm 00133 Fmt 4703 Sfmt 4703 52757 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) (quoting 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).4 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-DanielsMidland 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). 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 4 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’’’). E:\FR\FM\04SEN1.SGM 04SEN1 mstockstill on DSK4VPTVN1PROD with NOTICES 52758 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices 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 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 (‘‘the ‘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 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. § 16(e)(2). The language wrote into the statute what Congress intended when it enacted the Tunney Act in 1974, as Senator Tunney explained: ‘‘[t]he court is nowhere compelled to go to trial or to engage in extended proceedings which might have VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 (‘‘Hillshire’’) 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; VIII. AND WHEREAS, Plaintiffs require Determinative Documents Defendants to make certain divestitures for the purpose of remedying the loss of There are no determinative materials or documents within the meaning of the competition alleged in the Complaint; AND WHEREAS, Defendants have APPA that were considered by the represented to Plaintiffs that the divestitures United States in formulating the required below can and will be made and proposed Final Judgment. that Defendants will later raise no claim of Dated: August 27, 2014 hardship or difficulty as grounds for asking the Court to modify any of the divestiture Respectfully submitted, provisions contained below; /s/ lllllllllllllllll NOW THEREFORE, before any testimony Angela L. Hughes (D.C. Bar #303420)* is taken, without trial or adjudication of any Katherine A. Celeste issue of fact or law, and upon consent of the Jill A. Ptacek parties, it is ORDERED, ADJUDGED AND DECREED: Attorneys, Antitrust Division, U.S. 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 Sen. John 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 11.5 Department of Justice, 450 Fifth Street, N.W., Suite 8000, Washington, DC 20530, Telephone: (202) 307–6410, Facsimile: (202) 307–2784, Email: Angela.Hughes@usdoj.gov *Attorney of Record United States District Court for the District of Columbia United States of America, State of Illinois, State of Iowa, and State of Missouri, Plaintiffs, v. Tyson Foods, INC., and The Hillshire Brands Company, Defendants. Case: 1:14-cv-01474-JEB Judge: Hon. James Boasberg Filed: 08/27/2014 Proposed Final Judgment WHEREAS, Plaintiffs, United States of America and the States of Illinois, Iowa, and Missouri (collectively ‘‘Plaintiffs’’), filed their Complaint on August 27, 2014, and Plaintiffs and Defendants Tyson Foods, Inc. (‘‘Tyson’’) and The Hillshire Brands Company 5 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., No. 73–CV–681–W–1, 1977–1 Trade Cas. (CCH) ¶ 61,508, at 71,980, at *22 (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, 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.’’). PO 00000 Frm 00134 Fmt 4703 Sfmt 4703 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. § 18). II. Definitions As used in this Final Judgment: A. ‘‘Acquirer’’ means the entity to which Defendant Tyson divests the Divestiture Assets. B. ‘‘Tyson’’ means Defendant Tyson Foods, Inc., a Delaware corporation with its headquarters in Springdale, Arkansas, its successors and assigns, and its subsidiaries, including Tyson Fresh Meats, Inc., divisions, groups, affiliates, partnerships and joint ventures, and their directors, officers, managers, agents, and employees. C. ‘‘Tyson Fresh Meats, Inc.’’ means Tyson Fresh Meats, Inc, a subsidiary of Tyson. D. ‘‘Hillshire’’ means Defendant The Hillshire Brands Company, a Maryland corporation with its headquarters in Chicago, Illinois, its successors and assigns, and its subsidiaries, divisions, groups, affiliates, partnerships, and joint ventures, and their directors, officers, managers, agents, and employees. E. ‘‘Divestiture assets’’ means the entire business of Heinold Hog Markets, including any and all of the tangible or intangible assets used primarily in connection with Heinold Hog Markets, including but not limited to, all leasehold and real property rights associated with the buying stations located at 700 East Henry, Atkinson, Illinois 61235; 3125 So St Rd 29, Burlington, Indiana 46915; 3069 380th St, Story City, Iowa 50248; 624 Cunningham Dr, Sioux City, Iowa 51106; 12760 M60 West, Jones, Michigan 49061; 401 Route W, Monroe City, Missouri 63456; 954 14th Ave, St. Paul, E:\FR\FM\04SEN1.SGM 04SEN1 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices Nebraska 68873; and 2720 Hwy 60, Windom, Minnesota 56101; any inventory, office furniture, materials, supplies, livestock pens, scales and other tangible property and assets used primarily in connection with operating the BOS purchasing business; all licenses, permits, and authorizations issued by any governmental organization relating to operating the BOS purchasing business, subject to licensor’s approval or consent; all contracts, teaming arrangements, agreements, leases, commitments, certifications, and understandings relating to operating the BOS purchasing business, including supply agreements and employee contracts; all customer and Producer lists, specifications, contracts, accounts, and credit records; all records relating to the business of operating BOS buying stations including repairs; all intangible assets used in the development, production, and operation of the BOS purchasing business, including, but not limited to, exclusive use of the Heinold Hog Markets name and trademark, all the licenses and sublicenses, technical information, computer software and related documentation, know-how, drawings, blueprints, designs, design protocols, specifications for materials, specifications for parts and devices, and safety procedures for the handling of materials, substances and BOS. F. ‘‘Heinold Hog Markets’’ means Heinold Hog Markets, Tyson’s BOS purchasing business that is part of Tyson Hog Markets, Inc., a subsidiary of Tyson Fresh Meats, Inc. G. ‘‘BOS’’ means boars (un-castrated male hogs), outs (runts or deformed hogs), and sows (female hogs that have produced at least one litter). H. ‘‘Buying station’’ means those facilities identified in II.E. above at which BOS are purchased from Producers, sorted, weighed, and subsequently sold and shipped to processors or packers. I. ‘‘Plaintiff States’’ means the States of Illinois, Iowa, and Missouri. J. ‘‘Producers’’ means owners or operators of facilities at which hogs are bred or farrowed. K. ‘‘Proposed Transaction’’ means Tyson’s proposed acquisition of Hillshire pursuant to the Agreement and Plan of Merger entered into by Tyson and Hillshire dated July 1, 2014. mstockstill on DSK4VPTVN1PROD with NOTICES III. Applicability A. This Final Judgment applies to Tyson and Hillshire, as defined above, 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 Section IV and V of this Final Judgment, Defendant Tyson sells or otherwise disposes 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. Defendant Tyson need not obtain such an agreement from the acquirer of the assets divested pursuant to this Final Judgment. VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 IV. Divestitures A. Defendants are ordered and directed, within 90 calendar days after the filing of the Complaint in this matter, or five (5) calendar days after notice of the entry of this Final Judgment by the Court, whichever is later, to divest the Divestiture Assets in a manner consistent with this Final Judgment to an Acquirer acceptable to the United States, in its sole discretion after consultation with the Plaintiff States. Defendants agree to use their best efforts to divest the Divestiture Assets 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 60 calendar days in total, and shall notify the Court in such circumstances. B. In accomplishing the divestiture ordered by this Final Judgment, Defendants promptly shall make known, by usual and customary means, the availability of the Divestiture Assets. Defendants shall inform any person making inquiry regarding a possible purchase of the Divestiture Assets that they are being divested pursuant to this Final Judgment and provide that person with a copy of this Final Judgment. Defendants shall offer to furnish to all prospective Acquirers, 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 privileges 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 any other person. C. Defendants shall provide the Acquirer and the United States information relating to the personnel involved in the operation and management of the Divestiture Assets to enable the Acquirer to make offers of employment. Defendants will not interfere with any negotiations by the Acquirer to employ any Defendant employee whose primary responsibility is the operation and management of the Divestiture Assets. For a period of twelve (12) months following entry of the Final Judgment, the Defendants shall not solicit to hire, or hire, any Tyson employee hired by the Acquirer unless (1) such individual is terminated or laid off by the Acquirer, or (2) the Acquirer agrees in writing that Defendants may solicit or hire that individual. D. Defendants shall permit prospective Acquirers of the Divestiture Assets to have reasonable access to personnel and to make inspections of the physical facilities of 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. E. Defendants shall warrant to the Acquirer that each asset will be operational on the date of sale. F. Defendants shall warrant to the Acquirer that there are no material defects in the environmental, zoning, or other permits pertaining to the operation of each asset. G. Defendants shall not take any action that will impede in any way the permitting, operation, or divestiture of the Divestiture PO 00000 Frm 00135 Fmt 4703 Sfmt 4703 52759 Assets. 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. H. Unless the United States otherwise consents in writing, the divestiture pursuant to Section IV, or by Divestiture Trustee appointed pursuant to Section V, of this Final Judgment, shall include the entire Divestiture Assets, and shall be accomplished in such a way as to satisfy the United States, in its sole discretion, after consultation with the Plaintiff States, that the Divestiture Assets can and will be used by the Acquirer as part of a viable, ongoing business purchasing BOS. 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 that, in the United States’s sole judgment after consultation with the Plaintiff States, has the intent and capability (including the necessary managerial, operational, technical and financial capability) of competing effectively in the business of purchasing of BOS; and (2) shall be accomplished so as to satisfy the United States, in its sole discretion, after consultation with the Plaintiff States, that none of the terms of any agreement between an Acquirer and Defendants give 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 to compete effectively. V. Appointment of Divestiture Trustee A. If Defendant Tyson has not divested the Divestiture Assets within the time period specified in Section IV(A), Defendants shall notify the United States and the Plaintiff States of that fact in writing. Upon application of the United States, the Court shall appoint a Divestiture Trustee selected by the United States and approved by the Court to effect the divestiture of the Divestiture Assets. B. After the appointment of a Divestiture Trustee becomes effective, only the Divestiture Trustee shall have the right to sell the Divestiture Assets. The Divestiture Trustee shall have the power and authority to accomplish the divestiture to an Acquirer acceptable to the United States, after consultation with the Plaintiff States, at such price and on such terms as are then obtainable upon reasonable effort by the Divestiture 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 Section V(D) of this Final Judgment, the Divestiture Trustee may hire at the cost and expense of Defendants any investment bankers, attorneys, or other agents, who shall be solely accountable to the Divestiture E:\FR\FM\04SEN1.SGM 04SEN1 mstockstill on DSK4VPTVN1PROD with NOTICES 52760 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices Trustee, reasonably necessary in the Divestiture Trustee’s judgment to assist in the divestiture. Any such investment bankers, attorneys, or other agents shall serve on such terms and conditions as the United States approves including confidentiality requirements and conflict of interest certifications. C. Defendants shall not object to a sale by the Divestiture Trustee on any ground other than the Divestiture Trustee’s malfeasance. Any such objections by Defendants must be conveyed in writing to the United States and the Divestiture Trustee within ten (10) calendar days after the Divestiture Trustee has provided the notice required under Section VI. D. The Divestiture Trustee shall serve at the cost and expense of Defendant Tyson, on such terms and conditions as the United States approves, including confidentiality requirements and conflict of interest certifications. The Divestiture Trustee shall account for all monies derived from the sale of the assets sold by the Divestiture Trustee and all costs and expenses so incurred. After approval by the Court of the Divestiture Trustee’s accounting, including fees for its services yet unpaid and those of any professionals and agents retained by the Divestiture Trustee, all remaining money shall be paid to Defendant Tyson and the trust shall then be terminated. The compensation of the Divestiture Trustee and any professionals and agents retained by the Divestiture Trustee shall be reasonable in light of the value of the Divestiture Assets and based on a fee arrangement providing the Divestiture 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 Divestiture Trustee and Defendant Tyson are unable to reach agreement on the Divestiture Trustee’s or any agents’ or consultants’ compensation or other terms and conditions of engagement within fourteen (14) calendar days of appointment of the Divestiture Trustee, the United States may, in its sole discretion, take appropriate action, including making a recommendation to the Court. The Divestiture Trustee shall, within three (3) business days of hiring any other professionals or agents, provide written notice of such hiring and the rate of compensation to the Defendants and the United States. E. Defendants shall use their best efforts to assist the Divestiture Trustee in accomplishing the required divestiture. The Divestiture Trustee and any consultants, accountants, attorneys, and other agents retained by the Divestiture Trustee shall have full and complete access to the personnel, books, records, and facilities of the business to be divested, and Defendants shall develop financial and other information relevant to such business as the Divestiture Trustee may reasonably request, subject to reasonable protection for trade secret or other confidential research, development, or commercial information, or any applicable privilege for any of the forgoing. Defendants shall take no action to interfere with or to impede the Divestiture Trustee’s accomplishment of the divestiture. VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 F. After its appointment, the Divestiture Trustee shall file monthly reports with the United States and, as appropriate, the Court setting forth the Divestiture Trustee’s efforts to accomplish the divestiture ordered under this Final Judgment. To the extent such reports contain information that the Divestiture 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 Divestiture Trustee shall maintain full records of all efforts made to divest the Divestiture Assets. G. If the Divestiture Trustee has not accomplished the divestiture ordered under this Final Judgment within six (6) months after its appointment, the Divestiture Trustee shall promptly file with the Court a report setting forth (1) the Divestiture Trustee’s efforts to accomplish the required divestiture, (2) the reasons, in the Divestiture Trustee’s judgment, why the required divestiture has not been accomplished, and (3) the Divestiture Trustee’s recommendations. To the extent such reports contains information that the Divestiture Trustee deems confidential, such reports shall not be filed in the public docket of the Court. The Divestiture 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 Divestiture Trustee’s appointment by a period requested by the United States. H. If the United States determines that the Divestiture Trustee has ceased to act or failed to act diligently or in a reasonably costeffective manner, it may recommend the Court appoint a substitute Divestiture Trustee. VI. Notice of Proposed Divestiture A. Within two (2) business days following execution of a definitive divestiture agreement, Defendant Tyson or the Divestiture Trustee, whichever is then responsible for effecting the divestiture required herein, shall notify the United States and the Plaintiff States of any proposed divestiture required by Section IV or V of this Final Judgment. If the Divestiture Trustee is responsible, it shall similarly notify Defendants. The notice 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 notice, the United States, after consultation with the PO 00000 Frm 00136 Fmt 4703 Sfmt 4703 Plaintiff States, may request from Defendants, the proposed Acquirer, any other third party, or the Divestiture Trustee, if applicable, additional information concerning the proposed divestiture, the proposed Acquirer, and any other potential Acquirer. Defendants and the Divestiture Trustee shall furnish any additional information requested of them 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, any third party, and the Divestiture Trustee, whichever is later, the United States shall provide written notice to Defendants and the Divestiture 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 Section V(C) of this Final Judgment. Absent written notice that the United States does not object to the proposed Acquirer or upon objection by the United States, a divestiture proposed under Section IV or Section V shall not be consummated. Upon objection by Defendants under Section V(C), a divestiture proposed under Section V shall not be consummated unless approved by the Court. VII. Financing Defendants shall not finance all or any part of any purchase made pursuant to Section IV or V of this Final Judgment. VIII. Hold Separate Until the divestiture required by this Final Judgment has 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 divestiture ordered by this Court. IX. Affidavits A. Within twenty (20) calendar days of the filing of the Complaint in this matter, and every thirty (30) calendar days thereafter until the divestiture has been completed under Section IV or V, Defendants shall deliver to the United States an affidavit as to the fact and manner of its compliance with Section IV or V of this Final Judgment. Each such affidavit shall include the name, address, and telephone number of each person who, during the preceding thirty (30) calendar days, 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 during that period. Each such affidavit shall also include a description of the efforts Defendants have taken to solicit buyers for the Divestiture Assets, and to provide required information to prospective Acquirers, including the limitations, if any, on such information. Assuming the information set forth in the affidavit is true and complete, any objection by the United E:\FR\FM\04SEN1.SGM 04SEN1 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices mstockstill on DSK4VPTVN1PROD with NOTICES States to information provided by Defendants, including limitation on information, shall be made within fourteen (14) calendar days of receipt of such affidavit. B. 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 VIII 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. C. 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. X. Appointment of Monitoring Trustee A. Upon application of the United States, the Court shall appoint a Monitoring Trustee selected by the United States and approved by the Court. B. The Monitoring Trustee shall have the power and authority to monitor Defendants’ compliance with the terms of this Final Judgment and the Hold Separate Stipulation and Order entered by this Court, and shall have such other powers as this Court deems appropriate. The Monitoring Trustee shall be required to investigate and report on the Defendants’ compliance with this Final Judgment and the Hold Separate Stipulation and Order and the Defendants’ progress toward effectuating the purposes of this Final Judgment, including but not limited to: keeping Tyson Fresh Meats, Inc. separate from the sow purchasing operations of Defendant Hillshire. C. Subject to Section X(E) of this Final Judgment, the Monitoring Trustee may hire at the cost and expense of Defendants any consultants, accountants, attorneys, or other agents, who shall be solely accountable to the trustee, reasonably necessary in the trustee’s judgment. Any such consultants, accountants, attorneys, or other agents shall serve on such terms and conditions as the United States approves including confidentiality requirements and conflict of interest certifications. D. Defendants shall not object to actions taken by the Monitoring Trustee in fulfillment of the Monitoring Trustee’s responsibilities under any Order of this Court 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 Monitoring Trustee within ten (10) calendar days after the action taken by the Monitoring Trustee giving rise to the Defendants’ objection. E. The Monitoring Trustee shall serve at the cost and expense of Defendants pursuant to a written agreement with Defendants and on such terms and conditions as the United States approves including confidentiality requirements and conflict of interest certifications. The compensation of the Monitoring Trustee and any consultants, accountants, attorneys, and other agents VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 retained by the Monitoring Trustee shall be on reasonable and customary terms commensurate with the individuals’ experience and responsibilities. If the Monitoring Trustee and Defendants are unable to reach agreement on the trustee’s or any agents’ or consultants’ compensation or other terms and conditions of engagement within 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. The Monitoring Trustee shall, within three (3) business days of hiring any consultants, accountants, attorneys, or other agents, provide written notice of such hiring and the rate of compensation to Defendants and the United States. F. The Monitoring Trustee shall have no responsibility or obligation for the operation of Defendants’ businesses. G. Defendants shall use their best efforts to assist the Monitoring Trustee in monitoring Defendants’ compliance with their individual obligations under this Final Judgment and under the Hold Separate Stipulation and Order. The Monitoring Trustee and any consultants, accountants, attorneys, and other agents retained by the Monitoring Trustee shall have full and complete access to the personnel, books, records, and facilities relating to compliance with this Final Judgment, subject to reasonable protection for trade secret or other confidential research, development, or commercial information or any applicable privileges. Defendants shall take no action to interfere with or to impede the Monitoring Trustee’s accomplishment of its responsibilities. H. After its appointment, the Monitoring Trustee shall file reports monthly, or more frequently as needed, with the United States, and, as appropriate, the Court setting forth Defendants’ efforts to comply with its obligations under this Final Judgment and under the Hold Separate Stipulation and Order. To the extent such reports contain information that the Monitoring Trustee deems confidential, such reports shall not be filed in the public docket of the Court. I. The Monitoring Trustee shall serve until the divestiture of all the Divestiture Assets is finalized pursuant to either Section IV or Section V of this Final Judgment. J. If the United States determines that the Monitoring Trustee has ceased to act or failed to act diligently or in a reasonably costeffective manner, it may recommend the Court appoint a substitute Monitoring Trustee. XI. Compliance Inspection A. For the purposes of determining or securing compliance with this Final Judgment, or of any related orders such as any Hold Separate 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 PO 00000 Frm 00137 Fmt 4703 Sfmt 4703 52761 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 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 counsel present (individual and/or Defendant’s counsel), 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 response 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 (i) the executive branch of the United States, or (ii) the Plaintiff States, except in the course of legal proceedings to which the United States is a party (including grand jury proceedings), or 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). XII. No Reacquisition Defendants may not reacquire any part of the Divestiture Assets during the term of this Final Judgment. XIII. 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. XIV. Expiration of Final Judgment Unless this Court grants an extension, this Final Judgment shall expire ten years from the date of its entry. XV. Public Interest Determination Entry of this Final Judgment is in the public interest. The parties have complied with the requirements of the Antitrust E:\FR\FM\04SEN1.SGM 04SEN1 52762 Federal Register / Vol. 79, No. 171 / Thursday, September 4, 2014 / Notices Procedures and Penalties Act, 15 U.S.C. § 16, including making copies available to the public 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 response to comments filed with the Court, entry of this Final Judgment is in the public interest. Date: llllllllllllllllll Court approval subject to procedures of Antitrust Procedures and Penalties Act, 15 U.S.C. § 16. lllllllllllllllllllll United States District Judge [FR Doc. 2014–21102 Filed 9–3–14; 8:45 am] BILLING CODE 4410–11–P DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. DEA–392] Importer of Controlled Substances Application: Fisher Clinical Services, Inc. ACTION: Notice of application. Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration in accordance with 21 CFR 1301.34(a) on or before October 6, 2014. Such persons may also file a written request for a hearing on the application pursuant to 21 CFR 1301.43 on or before October 6, 2014. ADDRESSES: Written comments should be sent to: Drug Enforcement Administration, Attention: DEA Federal Register Representative/ODW, 8701 Morrissette Drive, Springfield, Virginia 22152. Request for hearings should be sent to: Drug Enforcement Administration, Attention: Hearing Clerk/LJ, 8701 Morrissette Drive, Springfield, Virginia 22152. SUPPLEMENTARY INFORMATION: The Attorney General has delegated his authority under the Controlled Substances Act to the Administrator of the Drug Enforcement Administration (DEA), 28 CFR 0.100(b). Authority to exercise all necessary functions with respect to the promulgation and implementation of 21 CFR part 1301, incident to the registration of importers, of controlled substances (other than final orders in connection with suspension, denial, or revocation of registration) has been redelegated to the Deputy Assistant Administrator of the DEA Office of Diversion Control (‘‘Deputy Assistant Administrator’’) mstockstill on DSK4VPTVN1PROD with NOTICES DATES: VerDate Mar<15>2010 18:14 Sep 03, 2014 Jkt 232001 pursuant to section 7 of 28 CFR pt. 0, subpt. R, App. In accordance with 21 CFR 1301.34(a), this is notice that on December 13, 2013, Fisher Clinical Services, Inc., 700A–C Nestle Way, Breinigsville, Pennsylvania 18031–1522 applied to be registered as an importer of the following basic classes of controlled substances: Controlled substance Methylphenidate (1724) ................ Levorphanol (9220) ...................... Noroxymorphone (9668) .............. Tapentadol (9780) ........................ Schedule II II II II The company plans to import the listed substances for analytical research and testing and clinical trials. This authorization does not extend to the import of a finished FDA approved or non-approved dosage form for commercial distribution in the United States. The company plans to import an intermediate form of Tapentadol (9780) to bulk manufacture Tapentadol for distribution to its customers. Dated: August 27, 2014. Joseph T. Rannazzisi, Deputy Assistant Administrator. [FR Doc. 2014–21056 Filed 9–3–14; 8:45 am] Administration, Attention: Hearing Clerk/LJ, 8701 Morrissette Drive, Springfield, Virginia 22152. Comments and request for hearings on applications to import narcotic raw material are not appropriate. 72 FR 3417 (January 25, 2007). The Attorney General has delegated his authority under the Controlled Substances Act to the Administrator of the Drug Enforcement Administration (DEA), 28 CFR 0.100(b). Authority to exercise all necessary functions with respect to the promulgation and implementation of 21 CFR part 1301, incident to the registration of importers of controlled substances (other than final orders in connection with suspension, denial, or revocation of registration) has been redelegated to the Deputy Assistant Administrator of the DEA Office of Diversion Control (‘‘Deputy Assistant Administrator’’) pursuant to section 7 of 28 CFR pt. 0, subpt. R, App. In accordance with 21 CFR 1301.34(a), this is notice that on July 3, 2014, Cody Laboratories, Inc., 601 Yellowstone Avenue, Cody, Wyoming 82414–9321, applied to be registered as an importer of the following basic classes of controlled substances: SUPPLEMENTARY INFORMATION: BILLING CODE 4410–09–P Controlled substance DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. DEA–392] Importer of Controlled Substances Application: Cody Laboratories, Inc. ACTION: Notice of application. On July 3, 2014, Cody Laboratories, Inc., Cody, Wyoming, applied to be registered as an importer of basic classes of controlled substances. DATES: Registered bulk manufacturers of the affected basic classes, and applicants therefore, may file written comments on or objections to the issuance of the proposed registration in accordance with 21 CFR 1301.34(a) on or before October 6, 2014. Such persons may also file a written request for a hearing on the application pursuant to 21 CFR 1301.43 on or before October 6, 2014. ADDRESSES: Written comments should be sent to: Drug Enforcement Administration, Attention: DEA Federal Register Representative/ODW, 8701 Morrissette Drive, Springfield, Virginia 22152. Request for hearings should be sent to: Drug Enforcement SUMMARY: PO 00000 Frm 00138 Fmt 4703 Sfmt 4703 Phenylacetone (8501) .................. Poppy Straw Concentrate (9670) Tapentadol (9780) ........................ Schedule II II II The company plans to import narcotic raw materials for manufacturing and further distribution to its customers. The company is registered with the DEA as a manufacturer of several controlled substances that are manufactured from poppy straw concentrate. The company plans to import an intermediate form of tapentadol (9780), to bulk manufacture tapentadol for distribution to its customers. Dated: August 27, 2014. Joseph T. Rannazzisi, Deputy Assistant Administrator. [FR Doc. 2014–21058 Filed 9–3–14; 8:45 am] BILLING CODE 4410–09–P DEPARTMENT OF JUSTICE Drug Enforcement Administration [Docket No. DEA–392] Importer of Controlled Substances Registration: Mylan Technologies, Inc. ACTION: E:\FR\FM\04SEN1.SGM Notice of registration. 04SEN1

Agencies

[Federal Register Volume 79, Number 171 (Thursday, September 4, 2014)]
[Notices]
[Pages 52751-52762]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-21102]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States, State of Illinois, State of Iowa, and State of 
Missouri v. Tyson Foods, Inc. and The Hillshire Brands Company; 
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, 
Stipulation and Competitive Impact Statement have been filed with the 
United States District Court for the District of Columbia in United 
States of America, State of Illinois, State of Iowa, and State of 
Missouri v. Tyson Foods, Inc. and

[[Page 52752]]

The Hillshire Brands Company, Civil Action No. 1:14-cv-01474-JEB. On 
August 27, 2014, the United States and the States of Illinois, Iowa, 
and Missouri filed a Complaint alleging that the proposed acquisition 
by Tyson Foods, Inc. (``Tyson'') of The Hillshire Brands Company 
(``Hillshire'') would violate Section 7 of the Clayton Act, 15 U.S.C. 
18. The proposed Final Judgment, filed the same time as the Complaint, 
requires Tyson to divest Heinold Hog Markets, its division that 
purchases sows.
    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 William H. Stallings, Chief, Transportation, 
Energy, and Agriculture Section, Antitrust Division, Department of 
Justice, Washington, DC 20530, (telephone: 202-514-9323).

Patricia A. Brink,
Director of Civil Enforcement.

United States District Court for the District of Columbia

    United States of America, U.S. Department of Justice, Antitrust 
Division, 450 Fifth Street NW., Suite 8000, Washington, D.C. 20530, 
State of Illinois, by its Attorney General, Lisa Madigan, 100 West 
Randolph Street, Chicago, Illinois 60601, State of Iowa, Iowa 
Department of Justice, Special Litigation Division, Hoover Office 
Building-Second Floor, 1305 East Walnut Street, Des Moines, Iowa 
50319, and State of Missouri, Office of the Attorney General, 
Consumer Protection Division, Post Office Box 899, Jefferson City, 
Missouri 65102, Plaintiffs, v. Tyson Foods, Inc., 2200 Don Tyson 
Parkway, Springdale, Arkansas 72762-6999, and The Hillshire Brands 
Company, 400 South Jefferson Street, Chicago, Illinois 60607, 
Defendants.

Case: 1:14-cv-01474-JEB

Judge: Hon. James Boasberg

Filed: 08/27/2014

Complaint

    The United States of America, acting under the direction of the 
Attorney General of the United States, and the States of Illinois, 
Iowa, and Missouri (collectively, ``Plaintiffs'') bring this civil 
antitrust action to enjoin the proposed acquisition by Tyson Foods, 
Inc. (``Tyson'') of The Hillshire Brands Company (``Hillshire'') 
(collectively, ``Defendants'') and to obtain other equitable relief. 
Plaintiffs allege as follows:

I.

Nature of the Action

    1. Tyson and Hillshire compete against each other and against 
others to procure sows from farmers in the United States. Farmers earn 
approximately $700 million annually from sales of sows and rely on 
competition among purchasers to ensure competitive prices. Tyson's 
proposed acquisition of Hillshire would eliminate head-to-head 
competition between the companies and create a firm that would account 
for over a third of all sows purchased from farmers in the United 
States.
    2. Sows are female pigs that are raised for the purpose of breeding 
hogs. At the end of their productive breeding lives, sows are sold for 
slaughter. Packers such as Hillshire use the meat from sows in the 
production of pork sausage. In contrast, hogs are swine raised solely 
for the purpose of slaughter; their meat is typically used for pork 
products other than sausage.
    3. Tyson, through its Heinold Hog Markets division (``Heinold''), 
purchases sows from farmers and re-sells them to packers, including 
Hillshire. Tyson has buying stations located throughout the Midwest 
that procure sows directly from local farmers, sort the sows according 
to different characteristics, and ship them to packers according to 
each packer's particular requirements. Packers overwhelmingly use 
marketers such as Heinold to procure sows rather than purchase directly 
from farmers due to the efficiencies marketers offer in terms of 
sorting, shipping, and other services. Hillshire is one of the few 
packers that purchases sows directly from farmers; as such, it competes 
directly against Heinold to procure sows from farmers.
    4. On July 1, 2014, Tyson and Hillshire entered into a definitive 
agreement under which Tyson will acquire Hillshire. Unless enjoined, 
the proposed acquisition is likely to lessen competition substantially 
in the market for the purchase of sows from farmers in the United 
States in violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  
18.

II.

Jurisdiction and Venue

    5. The United States brings this action under Section 15 of the 
Clayton Act, 15 U.S.C. Sec.  25, and the Plaintiff States bring this 
action under Section 16 of the Clayton Act, 15 U.S.C. Sec.  26, to 
prevent and restrain Defendants from violating Section 7 of the Clayton 
Act, 15 U.S.C. Sec.  18. The Plaintiff States, by and through their 
respective Attorneys General, bring this action as parens patriae on 
behalf of the citizens, general welfare, and economy of each of their 
states.
    6. Defendants are engaged in interstate commerce and in activities 
substantially affecting interstate commerce. Tyson, through Heinold, 
and Hillshire purchase sows from farmers located throughout the United 
States. This Court has subject matter jurisdiction over this action and 
jurisdiction over the parties pursuant to 15 U.S.C. Sec.  25, and 28 
U.S.C. Sec. Sec.  1331, 1337(a), and 1345.
    7. Defendants have consented to venue and personal jurisdiction in 
this District.

III.

Defendants and the Proposed Transaction

    8. Tyson Foods, Inc. is a Delaware corporation with its principal 
place of business in Springdale, Arkansas. In 2013, Tyson had total 
revenues of approximately $34.4 billion. Tyson is one of the world's 
largest meat companies. It produces, distributes, and markets chicken, 
beef, pork, and prepared food products. Tyson Hog Markets, Inc., a 
subsidiary of Tyson and Tyson Fresh Meats, Inc., purchases hogs for 
Tyson's hog processing facilities. Tyson does not process sows. Tyson 
does, however, buy and resell sows through Heinold. In 2013, Heinold 
had overall revenues of approximately $270 million.
    9. The Hillshire Brands Company is a Maryland corporation with its 
principal place of business in Chicago, Illinois. Hillshire is a 
manufacturer and marketer of brand name food products for the retail 
and foodservice markets, including sausage, hot dogs, and luncheon 
meats. Its brand names include Jimmy Dean, Ball Park, and Hillshire 
Farm. Hillshire's total revenues were approximately $3.9 billion for 
the year ended June 29, 2013.
    10. On July 1, 2014, Tyson and Hillshire entered into a definitive 
agreement for the acquisition by Tyson

[[Page 52753]]

of Hillshire. On July 16, 2014, Tyson commenced a tender offer to 
purchase all of Hillshire's outstanding shares. The tender offer is 
conditioned on the valid tendering, without a valid withdrawal, of at 
least two-thirds of Hillshire's outstanding stock prior to expiration 
of the offer. As of August 12, over 70% of Hillshire's outstanding 
shares had been validly tendered and not validly withdrawn.

IV.

Trade and Commerce

A. The Sow Packing Industry

    11. Sausage producers primarily buy sows from marketers such as 
Heinold. Marketers purchase sows from individual farmers and assemble 
truck loads (with approximately 100 sows per load) for delivery to 
sausage plants. Marketers utilize buying stations to procure sows from 
farmers. A buying station includes space for offloading and loading 
sows, pens for holding the sows, scales, and administrative space. Sows 
are usually kept at a buying station no longer than three days and may 
be shipped out to a slaughterer the same day they arrive from a farm.
    12. Larger marketers have multiple buying stations. Heinold 
operates eight buying stations located in Atkinson, Illinois; 
Burlington, Indiana; Randall and Sioux City, Iowa; Jones, Michigan; 
Windom, Minnesota; Monroe City, Missouri, and St. Paul, Nebraska. 
Heinold buys sows from more than 2,400 farmers located throughout the 
United States. In 2013, Heinold purchased about 660,000 sows from 
farmers in the United States, paying more than $150 million to farmers.
    13. Hillshire slaughters sows and produces sausage at a facility in 
Newbern, Tennessee. Whereas most other sausage producers purchase 
nearly all of their sows from marketers, Hillshire is unique among 
major sausage manufacturers in that it purchases over half of its sows 
directly from farmers. The sows that Hillshire purchases from farmers 
are usually transported directly by truck from the farm to Hillshire's 
Tennessee facility. Hillshire purchases sows from approximately 100 
farmers located throughout the United States. In 2013, it purchased 
more than 250,000 sows from farmers in the United States, paying 
approximately $80 million to farmers.
    14. The frequency and number of a particular farmer's sales of sows 
depends on the size of its breeding operations. Larger operations sell 
sows every week; smaller operations sell sows much less frequently. 
Some operations are of a sufficient size to be able to sell sows by the 
truckload whereas many farms sell lots of smaller sizes.

B. The Relevant Market

    15. There are no economic uses for slaughtered sows other than for 
the production of pork sausage. It is highly unlikely that a small 
decrease in the prices paid for sows would be rendered unprofitable by 
a switch of the sale of sows to other purchasers for any other use.
    16. The purchase of sows from farmers is a relevant antitrust 
product market. In part because income from sow sales represents a 
small percentage of the overall revenues of a hog breeding operation, a 
small decrease in the prices farmers receive for sows typically would 
not affect farmers' decisions about when to slaughter sows, the size of 
their breeding operations, or whether to abandon their investments in 
hog breeding altogether. Although the sale of sows constitutes a small 
percentage of overall revenues, farmers rely on this source of income 
as an important contribution to their earnings.
    17. Hog breeding operations are concentrated in the central area of 
the United States, including Iowa, Illinois, and Missouri, and in North 
Carolina. All else equal, farmers prefer to transport sows as short a 
distance as possible, unless the price that the farmer receives 
justifies shipping the sows farther. For instance, Hillshire sometimes 
fully compensates the farmer for transportation costs, which makes it 
economical for farmers located hundreds of miles away from the 
Hillshire plant to sell to Hillshire. Sows are commonly shipped 
throughout the central area of the United States where the purchasing 
facilities of the merging parties are located and where a major portion 
of sow sales and slaughter take place. The overwhelming majority of sow 
purchases occur within this region. As sows are also shipped even 
farther distances to slaughter facilities throughout the nation, the 
United States is the outer bounds of a relevant geographic market.
    18. Thus, the purchase of sows from farmers in the United States is 
a relevant market (i.e., a line of commerce and a section of the 
country) under Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.

C. Anticompetitive Effects

    19. The acquisition of Hillshire by Tyson will combine two of the 
major purchasers of sows from farmers in the United States and create a 
company that would account for approximately 35% of all purchases in 
this market. Using the Herfindahl-Hirschman Index (HHI), a standard 
measure of concentration, the post-acquisition HHI would increase by 
more than 500 points, resulting in a post-acquisition HHI of 
approximately 2100.
    20. Farmers have benefited from competition between Tyson and 
Hillshire in a variety of respects. Farmers track offering prices from 
sow purchasers. For many farmers, at particular points in time, the 
merging parties constitute their two best alternatives. The purchasing 
facilities of the merging parties are two of a small number of 
potential buyers from whom farmers seek or receive quotes. As the 
transaction eliminates a significant competing bidder, bidding is 
likely to be less aggressive and farmers are likely to receive lower 
prices for sows. As the prices offered decrease, farmers may ship sows 
to more distant purchasers. This additional shipping time and cost 
constitute an economic inefficiency that would follow from the 
elimination of competition between Hillshire and Tyson.
    21. Tyson's acquisition of Hillshire would eliminate actual and 
potential competition between Heinold Hog Markets and Hillshire, 
leaving farmers with fewer outlets for their sows and lower prices in 
violation of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.

D. Absence of Countervailing Factors

    22. Successful entry or repositioning into the market for the 
purchase of sows from farmers would not be timely, likely, or 
sufficient to deter the anticompetitive effects resulting from this 
transaction. Slaughterers that do not currently purchase sows directly 
from farmers are unlikely to begin to do so because they value the 
sorting and weighing services performed by marketers at their buying 
stations. Entry by new marketers or expansion by existing marketers 
sufficient to replace the market impact of the loss of competition 
resulting from the transaction is also unlikely. The process of 
locating and acquiring land, obtaining permits, and constructing buying 
stations would require an extensive period of time and would be 
unlikely to occur in response to anticompetitive price decreases 
resulting from the merger.

V.

Violation Alleged

    23. Plaintiffs hereby incorporate paragraphs 1 through 22.
    24. Unless enjoined, Tyson's proposed acquisition of Hillshire is 
likely to substantially lessen competition and restrain trade in the 
purchase of sows from farmers in the

[[Page 52754]]

United States in violation of Section 7 of the Clayton Act, 15 U.S.C. 
Sec.  18, in the following ways:
    a. actual and potential competition between Tyson and Hillshire in 
the purchase of sows from farmers in the United States will be 
eliminated;
    b. competition in the purchase of sows from farmers in the United 
States will be substantially lessened; and
    c. prices paid to farmers in the United States for sows will likely 
decrease.

VI.

Request for Relief

    25. Plaintiffs request that:
    a. Tyson's proposed acquisition of Hillshire be adjudged and 
decreed to be unlawful and in violation of Section 7 of the Clayton 
Act, 15 U.S.C. Sec.  18;
    b. Defendants and all persons acting on their behalf be 
preliminarily and permanently enjoined and restrained from consummating 
the proposed transaction or from entering into or carrying out any 
contract, agreement, plan, or understanding, the effect of which would 
be to combine Tyson and Hillshire;
    c. Plaintiffs be awarded its costs for this action; and
    d. Plaintiffs receive such other and further relief as the Court 
deems just and proper.
    Dated this 27th day of August, 2014.

    Respectfully submitted,

For Plaintiff United States:
/s/--------------------------------------------------------------------
William J. Baer (D.C. Bar 324723)
Assistant Attorney General for Antitrust

/s/--------------------------------------------------------------------
David I. Gelfand (D.C. BAR 416596)
Deputy Assistant Attorney General

/s/--------------------------------------------------------------------
Patricia A. Brink
Director of Civil Enforcement
/s/--------------------------------------------------------------------
William H. Stallings (D.C. BAR 444924)
Chief
Transportation, Energy & Agriculture Section

/s/--------------------------------------------------------------------
Caroline E. Laise
Assistant Chief
Transportation, Energy & Agriculture Section

/s/--------------------------------------------------------------------
Angela L. Hughes (D.C. Bar 303420)*,
Katherine A. Celeste,
Jill A. Ptacek,
Attorneys

Antitrust Division,
U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8000, 
Washington, DC 20530, Telephone: (202) 307-6410, Facsimile: (202) 
307-2784, E-mail: Angela.Hughes@usdoj.gov

Attorneys for the United States
*Attorney of Record

For Plaintiff State of Illinois
Lisa Madigan
Attorney General

Cara Hendrickson
Chief, Public Interest Division

Robert Pratt
Chief, Antitrust Bureau
Public Interest Division

/s/--------------------------------------------------------------------
Blake Harrop
Senior Assistant Attorney General, Illinois Bar No. 99000, 100 West 
Randolph Street, Chicago, Illinois 60601, Ph: 312-814-1004, Fax: 
312-814-4209, bharrop@atg.state.il.us
For Plaintiff State of Iowa:

Thomas J. Miller
Attorney General

/s/--------------------------------------------------------------------
Layne M. Lindebak (IA Bar AT0004755)
Assistant Attorney General, Special Litigation Division, Hoover 
Office Building--Second Floor, 1305 East Walnut Street, Des Moines, 
IA 50319, Tel: (515) 281-7054, Fax: (515) 281-4902; 
Layne.Lindebak@iowa.com.

Dated: August 26, 2014

For Plaintiff State of Missouri:
Chris Koster
Attorney General
/s/--------------------------------------------------------------------
Anne E. Schneider
Assistant Attorney General/Antitrust Counsel
Kyle A. Poelker
Assistant Attorney General
Office of the Missouri Attorney General, P.O. Box 899, Jefferson 
City, MO 65102, Phone: (573) 751-7445, Fax: (573) 751-2041, Email: 
Anne.Schneider@ago.mo.gov, Email: Kyle.Poelker@ago.mo.gov

Certificate of Service

    I, Angela L. Hughes, hereby certify that on August 27, 2014, I 
caused a copy of the foregoing Complaint, Proposed Final Judgment, Hold 
Separate Stipulation and Order, Competitive Impact Statement, and 
United States' Explanation of Consent Decree Procedures to be served on 
Defendants Tyson Foods, Inc. and The Hillshire Brands Company by 
electronic mail to their duly authorized legal representatives of the 
Defendants, as follows:

For Defendants

Tyson Foods, Inc.
Ronan P. Harty
Davis Polk & Wardwell LLP, 450 Lexington Avenue, New York, NY 10017, 
Telephone: (212) 450-4870, Facsimile: (202) 701-5870, Email: 
ronan.harty@DavisPolk.com

The Hillshire Brands Company
Clifford H. Aronson
(D.C. Bar 335182)
Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New 
York, NY 10036-6522, Telephone: 212.735.2644, Facsimile: 
917.777.2644, Email: clifford.aronson@skadden.com

/s/--------------------------------------------------------------------
Angela L Hughes*
Attorney, Antitrust Division, U.S. Department of Justice, 450 Fifth 
Street, N.W., Suite 8000, Washington, DC 20530, Telephone: (202) 
307-6410, Facsimile: (202) 307-2784, Email: angela.hughes@usdoj.gov

United States District Court for the District of Columbia

    United States of America, State of Illinois, State of Iowa, and 
State of Missouri, Plaintiffs, v. Tyson Foods, Inc., and The 
Hillshire Brands Company, Defendants.

Case: 1:14-cv-01474-JEB

Judge: Hon. James Boasberg

Filed: 08/27/2014

Competitive Impact Statement

    Plaintiff United States of America, 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

    Defendant Tyson Foods, Inc. (``Tyson'') and Defendant The Hillshire 
Brands Company (``Hillshire'') (collectively, ``Defendants'') entered 
into an agreement on July 1, 2014, pursuant to which Tyson will acquire 
all of the outstanding shares of Hillshire. The all-cash transaction, 
which includes Hillshire's outstanding net debt, is valued at 
approximately $8.55 billion. The United States filed a civil antitrust 
Complaint on August 27, 2014, seeking to enjoin the proposed 
acquisition. The Complaint alleges that the likely effect of this 
acquisition would be to lessen competition substantially in the market 
for the purchase of sows from farmers in the United States in violation 
of Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.
    At the same time the Complaint was filed, Plaintiffs also filed a 
Hold Separate Stipulation and Order (``Hold Separate'') and proposed 
Final Judgment, which are designed to eliminate the anticompetitive 
effects of the acquisition. Under the proposed Final Judgment, which is 
explained more fully below, Defendants are to divest Tyson's sow 
purchasing business, also known as Heinold Hog Markets (the 
``Divestiture Assets''). Under the terms of the Hold Separate, the 
Defendants will take certain steps to ensure that Tyson Hog Markets, 
Inc., a subsidiary of Tyson that includes the Divestiture Assets, is 
operated as a competitively independent, economically viable and 
ongoing business concern that will remain independent of Hillshire's 
sow purchasing operation and will be uninfluenced by the consummation 
of the acquisition, and that competition between Tyson and Hillshire in 
the purchase of sows from farmers is maintained during the pendency of 
the ordered divestiture.

[[Page 52755]]

    Plaintiffs and Defendants have stipulated that the proposed Final 
Judgment may be entered after compliance with the APPA. 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.

II.

Description of the Events Giving Rise to the Alleged Violation

A. The Defendants and the Proposed Transaction

    Defendant Tyson is a Delaware corporation with its headquarters in 
Springdale, Arkansas. In 2013, Tyson had total revenues of 
approximately $34.4 billion. Tyson is one of the world's largest meat 
companies, producing, distributing, and marketing chicken, beef, pork, 
and prepared foods. Tyson's subsidiary Tyson Fresh Meats, Inc. is 
responsible for the purchase of hogs and cattle for Tyson's processing 
facilities; hog purchases are handled by Tyson Hog Markets, Inc., a 
subsidiary of Tyson Fresh Meats. In addition to buying hogs for Tyson's 
processing facilities, Tyson Hog Markets' subsidiary Heinold Hog 
Markets (``Heinold''), buys and resells sows.\1\ In 2013, Heinold had 
revenues of approximately $270 million.
---------------------------------------------------------------------------

    \1\ Sows are female hogs that have produced at least one litter 
and will no longer be used for breeding. Heinold also purchases 
boars and outs (runts or deformed hogs) from farmers.
---------------------------------------------------------------------------

    Defendant Hillshire is a Maryland corporation headquartered in 
Chicago, Illinois. Hillshire is a manufacturer and marketer of brand 
name food products for the retail and foodservice markets, including 
sausage, hot dogs, and luncheon meats. Its brand names include Jimmy 
Dean, Ball Park, and Hillshire Farm. Hillshire's total revenues were 
approximately $3.9 billion for the year ended June 29, 2013.
    On July 1, 2014, Tyson and Hillshire entered into a definitive 
agreement for the acquisition by Tyson of Hillshire. On July 16, 2014, 
Tyson commenced a tender offer to purchase all of Hillshire's 
outstanding shares. The tender offer is conditioned on the valid 
tendering, without a valid withdrawal, of at least two-thirds of 
Hillshire's outstanding stock prior to expiration of the offer. As of 
August 12, over 70% of Hillshire's outstanding shares had been validly 
tendered and not validly withdrawn.

B. Industry Background

    Sows are female pigs raised for the purpose of breeding hogs. Sows 
are sold for slaughter at the end of their productive breeding lives. 
Packers use the meat from sows in the production of pork sausage. In 
contrast, hogs are swine raised solely for the purpose of slaughter; 
their meat is typically used for pork products other than sausage.
    Sausage producers, other than Hillshire, primarily buy sows from 
marketers such as Heinold. Marketers purchase sows from individual 
farmers and assemble truck loads (with approximately 100 sows per load) 
for delivery to sausage plants. Marketers utilize buying stations to 
procure sows from farmers. The frequency and number of a particular 
farmer's sales of sows depends on the size of its breeding operations. 
Larger operations sell sows every week; smaller operations sell sows 
much less frequently. Some operations are of a sufficient size to be 
able to sell sows by the truckload whereas many farms sell lots of 
smaller sizes.
    Heinold operates eight buying stations located in Atkinson, 
Illinois; Burlington, Indiana; Randall and Sioux City, Iowa; Jones, 
Michigan; Windom, Minnesota; Monroe City, Missouri, and St. Paul, 
Nebraska. Heinold buys sows from more than 2,400 farmers located 
throughout the United States. In 2013, Heinold purchased about 660,000 
sows from farmers in the United States, paying more than $150 million 
to farmers.
    Hillshire slaughters sows and produces sausage at a facility in 
Newbern, Tennessee. Whereas most other sausage producers purchase 
nearly all of their sows from marketers, Hillshire is unique in that it 
purchases over half of its sows directly from farmers. The sows that 
Hillshire purchases from farmers are usually transported directly by 
truck from the farm to Hillshire's Tennessee facility. Hillshire 
purchases sows from approximately 100 farmers located throughout the 
United States. In 2013, it purchased more than 250,000 sows from 
farmers in the United States, paying approximately $80 million to 
farmers.

C. Relevant Markets

    There are no economic uses for slaughtered sows other than for the 
production of pork sausage. It is highly unlikely that a small decrease 
in the prices paid for sows would be rendered unprofitable by farmers 
switching to selling sows to other purchasers for any other uses.
    The purchase of sows from farmers is a relevant antitrust product 
market. In part because income from sow sales represents a small 
percentage of the overall revenues of a hog breeding operation, a small 
decrease in the prices farmers receive for sows typically would not 
affect farmers' decisions about when to slaughter sows, the size of 
their breeding operations, or whether to abandon their investments in 
hog breeding altogether. Although the sale of sows constitutes a small 
percentage of overall revenues, farmers rely on this source of income 
as an important contribution to their earnings.
    Hog breeding operations are concentrated in the central area of the 
United States, including Iowa, Illinois, and Missouri, and in North 
Carolina. All else equal, farmers prefer to transport sows as short a 
distance as possible, unless the price that the farmer receives 
justifies shipping the sows farther. For instance, Hillshire sometimes 
fully compensates the farmer for transportation costs, which makes it 
economical for farmers located hundreds of miles away from the 
Hillshire plant to sell to Hillshire. Sows are commonly shipped 
throughout the central area of the United States where the purchasing 
facilities of the merging parties are located and where a major portion 
of sow sales and slaughter take place. The overwhelming majority of sow 
purchases occur within this region. As sows are also shipped even 
farther distances to slaughter facilities throughout the nation, the 
United States is the outer bounds of a relevant geographic market.
    Thus, the purchase of sows from farmers in the United States is a 
relevant market (i.e., a line of commerce and a section of the country) 
under Section 7 of the Clayton Act, 15 U.S.C. Sec.  18.

D. Anticompetitive Effects of Tyson's Acquisition of Hillshire

    The market for the purchase of sows from farmers is concentrated. 
The acquisition of Hillshire by Tyson will combine two of the major 
purchasers of sows from farmers in the United States and would create a 
company that accounts for approximately 35% of all purchases in this 
market. Using the Herfindahl-Hirschman Index, the post-acquisition HHI 
would increase by more than 500 points, resulting in a post-acquisition 
HHI of approximately 2100.
    Farmers have benefited from competition between Tyson and Hillshire 
in a variety of ways. Farmers track prices offered by sow purchasers. 
For many farmers, at particular points in time, the merging parties 
constitute their two best alternatives. The purchasing facilities of 
the merging parties are two of a small number of potential buyers from 
whom farmers

[[Page 52756]]

seek or receive quotes. As the transaction eliminates a significant 
competing bidder, bidding is likely to be less aggressive and farmers 
are likely to receive lower prices for sows. As the prices offered 
decrease, farmers may need to ship sows to more distant purchasers. 
This additional shipping time and cost constitute an economic 
inefficiency that would follow from the elimination of competition 
between Hillshire and Tyson.\2\
---------------------------------------------------------------------------

    \2\ Mergers of competing buyers can enhance market power on the 
buying side of a market, raising significant antitrust concerns. See 
U.S. Dep't of Justice and Federal Trade Commission, Horizontal 
Merger Guidelines (2010), Sec.  12.
---------------------------------------------------------------------------

    Successful entry or repositioning into the market for the purchase 
of sows from farmers would not be timely, likely, or sufficient to 
deter the anticompetitive effects resulting from this transaction. 
Slaughterers that do not currently purchase sows directly from farmers 
are unlikely to begin to do so because they value the sorting and 
weighing services performed by marketers at their buying stations. 
Entry by new marketers or expansion by existing marketers sufficient to 
replace the market impact of the loss of competition resulting from the 
transaction is also unlikely. The process of locating and acquiring 
land, obtaining permits, and constructing buying stations would require 
an extensive period of time and would be unlikely to occur in response 
to anticompetitive price decreases resulting from the merger.
    Tyson's acquisition of Hillshire would eliminate actual and 
potential competition between Tyson and Hillshire, leaving farmers with 
fewer outlets for their sows and lower prices in violation of Section 7 
of the Clayton Act, 15 U.S.C. Sec.  18.

III.

Explanation of the Proposed Final Judgment

    The divestiture requirement of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in the market 
for purchases of sows from U.S. farmers by establishing a new, 
independent, and economically viable competitor. The proposed Final 
Judgment requires the Defendants, within 90 days after the filing of 
the Complaint, or five days after notice of entry of the Final 
Judgment, whichever is later, to divest all of Heinold (``the 
Divestiture Assets''), which constitute all the assets Tyson currently 
uses to compete against Hillshire for sow purchases from U.S. farmers. 
Defendants must take all reasonable steps necessary to accomplish the 
divestiture quickly and shall cooperate with prospective purchasers.
    The terms of the proposed Final Judgment require the Defendants to 
divest the Divestiture Assets within 90 days. If Defendants are unable 
to accomplish the divestiture within this period, the United States, 
after consultation with the Plaintiff States, may extend this period up 
to 60 days and shall notify the Court in such circumstances. A prompt 
divestiture has the benefits of restoring competition lost as a result 
of the acquisition and reducing the possibility that the value of the 
assets will be diminished.
    Section V(B) of the Hold Separate Stipulation and Order specifies 
that the Divestiture Assets will be maintained as a viable business and 
that Hillshire employees will not gain access to customer or supplier 
lists specific to the Divestiture Assets prior to divestiture.
    Section IV(B) of the proposed Final Judgment requires the 
Defendants to furnish information to prospective acquirers in an 
attempt to sell the divestiture assets.
    Section X of the proposed Final Judgment provides that the United 
States may appoint a Monitoring Trustee with the power and authority to 
investigate and report on the parties' compliance with the terms of the 
Final Judgment and the Hold Separate during the pendency of the 
divestiture, including keeping Tyson Hog Markets separate from the sow 
purchasing operations of Hillshire. The Monitoring Trustee would not 
have any responsibility or obligation for the operation of the parties' 
businesses. The Monitoring Trustee will serve at Defendants' expense, 
on such terms and conditions as the United States approves, and 
Defendants must assist the trustee in fulfilling its obligations. The 
Monitoring Trustee will file monthly reports and will serve until the 
divestitures are complete. The Monitoring Trustee shall serve until the 
divestiture of all the Divestiture Assets is finalized pursuant to 
either Section IV or Section V of the Final Judgment.
    In the event that Defendants do not accomplish the divestiture 
within the periods prescribed in the proposed Final Judgment, Section V 
of the proposed Final Judgment provides that the Court will appoint a 
Divestiture Trustee selected by the United States to effect the sale of 
the Divestiture Assets. If a Divestiture Trustee is appointed, the 
proposed Final Judgment provides that Defendant Tyson will pay all 
costs and expenses of the Divestiture Trustee. The Divestiture 
Trustee's commission will be structured so as to incentivize the 
Divestiture Trustee to complete the divestiture as quickly as possible 
while trying to obtain the highest possible price for the Divestiture 
Assets. After his or her appointment becomes effective, the Divestiture 
Trustee will file monthly reports with the Court and the United States 
which set forth his or her efforts to accomplish the divestiture. At 
the end of six (6) months, if the divestiture has not been 
accomplished, the Divestiture 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 Divestiture Trustee's 
appointment.
    The divestiture provisions of the proposed Final Judgment will 
eliminate the anticompetitive effects of the acquisition in the market 
for the purchase of sows from U.S. farmers.

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

    Plaintiffs 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

[[Page 52757]]

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 United 
States 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: William H. Stallings, 
Chief, Transportation, Energy, and Agriculture Section, Antitrust 
Division, United States Department of Justice, 450 5th St. NW., Suite 
8000, 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 Tyson's acquisition of 
Hillshire. The United States is satisfied, however, that the 
divestiture of assets described in the proposed Final Judgment will 
preserve competition in the market for the purchase of sows from U.S. 
farmers. 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 
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 public interest standard under the Tunney Act); United 
States v. InBev N.V./S.A., No. 08-1965 (JR), 2009-2 Trade Cas. (CCH) ] 
76,736, 2009 U.S. Dist. LEXIS 84787, 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.'').\3\
---------------------------------------------------------------------------

    \3\ 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) (quoting 
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).\4\ 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).
---------------------------------------------------------------------------

    \4\ 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

[[Page 52758]]

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 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 (``the `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 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: ``[t]he 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 Sen. John 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.\5\
---------------------------------------------------------------------------

    \5\ 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., No. 73-CV-681-W-1, 1977-1 
Trade Cas. (CCH) ] 61,508, at 71,980, at *22 (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, 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: August 27, 2014

Respectfully submitted,

/s/--------------------------------------------------------------------
Angela L. Hughes (D.C. Bar 303420)*
Katherine A. Celeste
Jill A. Ptacek

Attorneys, Antitrust Division, U.S. Department of Justice, 450 Fifth 
Street, N.W., Suite 8000, Washington, DC 20530, Telephone: (202) 307-
6410, Facsimile: (202) 307-2784, Email: Angela.Hughes@usdoj.gov

*Attorney of Record

United States District Court for the District of Columbia

    United States of America, State of Illinois, State of Iowa, and 
State of Missouri, Plaintiffs, v. Tyson Foods, INC., and The 
Hillshire Brands Company, Defendants.

Case: 1:14-cv-01474-JEB
Judge: Hon. James Boasberg

Filed: 08/27/2014

Proposed Final Judgment

    WHEREAS, Plaintiffs, United States of America and the States of 
Illinois, Iowa, and Missouri (collectively ``Plaintiffs''), filed 
their Complaint on August 27, 2014, and Plaintiffs and Defendants 
Tyson Foods, Inc. (``Tyson'') and The Hillshire Brands Company 
(``Hillshire'') 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, Plaintiffs require Defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    AND WHEREAS, Defendants have represented to Plaintiffs that the 
divestitures required below can and will be made and that Defendants 
will later raise no claim of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture 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).

II. Definitions

    As used in this Final Judgment:
    A. ``Acquirer'' means the entity to which Defendant Tyson 
divests the Divestiture Assets.
    B. ``Tyson'' means Defendant Tyson Foods, Inc., a Delaware 
corporation with its headquarters in Springdale, Arkansas, its 
successors and assigns, and its subsidiaries, including Tyson Fresh 
Meats, Inc., divisions, groups, affiliates, partnerships and joint 
ventures, and their directors, officers, managers, agents, and 
employees.
    C. ``Tyson Fresh Meats, Inc.'' means Tyson Fresh Meats, Inc, a 
subsidiary of Tyson.
    D. ``Hillshire'' means Defendant The Hillshire Brands Company, a 
Maryland corporation with its headquarters in Chicago, Illinois, its 
successors and assigns, and its subsidiaries, divisions, groups, 
affiliates, partnerships, and joint ventures, and their directors, 
officers, managers, agents, and employees.
    E. ``Divestiture assets'' means the entire business of Heinold 
Hog Markets, including any and all of the tangible or intangible 
assets used primarily in connection with Heinold Hog Markets, 
including but not limited to, all leasehold and real property rights 
associated with the buying stations located at 700 East Henry, 
Atkinson, Illinois 61235; 3125 So St Rd 29, Burlington, Indiana 
46915; 3069 380th St, Story City, Iowa 50248; 624 Cunningham Dr, 
Sioux City, Iowa 51106; 12760 M60 West, Jones, Michigan 49061; 401 
Route W, Monroe City, Missouri 63456; 954 14th Ave, St. Paul,

[[Page 52759]]

Nebraska 68873; and 2720 Hwy 60, Windom, Minnesota 56101; any 
inventory, office furniture, materials, supplies, livestock pens, 
scales and other tangible property and assets used primarily in 
connection with operating the BOS purchasing business; all licenses, 
permits, and authorizations issued by any governmental organization 
relating to operating the BOS purchasing business, subject to 
licensor's approval or consent; all contracts, teaming arrangements, 
agreements, leases, commitments, certifications, and understandings 
relating to operating the BOS purchasing business, including supply 
agreements and employee contracts; all customer and Producer lists, 
specifications, contracts, accounts, and credit records; all records 
relating to the business of operating BOS buying stations including 
repairs; all intangible assets used in the development, production, 
and operation of the BOS purchasing business, including, but not 
limited to, exclusive use of the Heinold Hog Markets name and 
trademark, all the licenses and sublicenses, technical information, 
computer software and related documentation, know-how, drawings, 
blueprints, designs, design protocols, specifications for materials, 
specifications for parts and devices, and safety procedures for the 
handling of materials, substances and BOS.
    F. ``Heinold Hog Markets'' means Heinold Hog Markets, Tyson's 
BOS purchasing business that is part of Tyson Hog Markets, Inc., a 
subsidiary of Tyson Fresh Meats, Inc.
    G. ``BOS'' means boars (un-castrated male hogs), outs (runts or 
deformed hogs), and sows (female hogs that have produced at least 
one litter).
    H. ``Buying station'' means those facilities identified in II.E. 
above at which BOS are purchased from Producers, sorted, weighed, 
and subsequently sold and shipped to processors or packers.
    I. ``Plaintiff States'' means the States of Illinois, Iowa, and 
Missouri.
    J. ``Producers'' means owners or operators of facilities at 
which hogs are bred or farrowed.
    K. ``Proposed Transaction'' means Tyson's proposed acquisition 
of Hillshire pursuant to the Agreement and Plan of Merger entered 
into by Tyson and Hillshire dated July 1, 2014.

III. Applicability

    A. This Final Judgment applies to Tyson and Hillshire, as 
defined above, 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 Section IV and V of this Final 
Judgment, Defendant Tyson sells or otherwise disposes 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. Defendant Tyson 
need not obtain such an agreement from the acquirer of the assets 
divested pursuant to this Final Judgment.

IV. Divestitures

    A. Defendants are ordered and directed, within 90 calendar days 
after the filing of the Complaint in this matter, or five (5) 
calendar days after notice of the entry of this Final Judgment by 
the Court, whichever is later, to divest the Divestiture Assets in a 
manner consistent with this Final Judgment to an Acquirer acceptable 
to the United States, in its sole discretion after consultation with 
the Plaintiff States. Defendants agree to use their best efforts to 
divest the Divestiture Assets 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 60 calendar days in 
total, and shall notify the Court in such circumstances.
    B. In accomplishing the divestiture ordered by this Final 
Judgment, Defendants promptly shall make known, by usual and 
customary means, the availability of the Divestiture Assets. 
Defendants shall inform any person making inquiry regarding a 
possible purchase of the Divestiture Assets that they are being 
divested pursuant to this Final Judgment and provide that person 
with a copy of this Final Judgment. Defendants shall offer to 
furnish to all prospective Acquirers, 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 privileges 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 any other 
person.
    C. Defendants shall provide the Acquirer and the United States 
information relating to the personnel involved in the operation and 
management of the Divestiture Assets to enable the Acquirer to make 
offers of employment. Defendants will not interfere with any 
negotiations by the Acquirer to employ any Defendant employee whose 
primary responsibility is the operation and management of the 
Divestiture Assets. For a period of twelve (12) months following 
entry of the Final Judgment, the Defendants shall not solicit to 
hire, or hire, any Tyson employee hired by the Acquirer unless (1) 
such individual is terminated or laid off by the Acquirer, or (2) 
the Acquirer agrees in writing that Defendants may solicit or hire 
that individual.
    D. Defendants shall permit prospective Acquirers of the 
Divestiture Assets to have reasonable access to personnel and to 
make inspections of the physical facilities of 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.
    E. Defendants shall warrant to the Acquirer that each asset will 
be operational on the date of sale.
    F. Defendants shall warrant to the Acquirer that there are no 
material defects in the environmental, zoning, or other permits 
pertaining to the operation of each asset.
    G. Defendants shall not take any action that will impede in any 
way the permitting, operation, or divestiture of the Divestiture 
Assets. 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.
    H. Unless the United States otherwise consents in writing, the 
divestiture pursuant to Section IV, or by Divestiture Trustee 
appointed pursuant to Section V, of this Final Judgment, shall 
include the entire Divestiture Assets, and shall be accomplished in 
such a way as to satisfy the United States, in its sole discretion, 
after consultation with the Plaintiff States, that the Divestiture 
Assets can and will be used by the Acquirer as part of a viable, 
ongoing business purchasing BOS. 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 that, in the United States's 
sole judgment after consultation with the Plaintiff States, has the 
intent and capability (including the necessary managerial, 
operational, technical and financial capability) of competing 
effectively in the business of purchasing of BOS; and
    (2) shall be accomplished so as to satisfy the United States, in 
its sole discretion, after consultation with the Plaintiff States, 
that none of the terms of any agreement between an Acquirer and 
Defendants give 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 to compete effectively.

V. Appointment of Divestiture Trustee

    A. If Defendant Tyson has not divested the Divestiture Assets 
within the time period specified in Section IV(A), Defendants shall 
notify the United States and the Plaintiff States of that fact in 
writing. Upon application of the United States, the Court shall 
appoint a Divestiture Trustee selected by the United States and 
approved by the Court to effect the divestiture of the Divestiture 
Assets.
    B. After the appointment of a Divestiture Trustee becomes 
effective, only the Divestiture Trustee shall have the right to sell 
the Divestiture Assets. The Divestiture Trustee shall have the power 
and authority to accomplish the divestiture to an Acquirer 
acceptable to the United States, after consultation with the 
Plaintiff States, at such price and on such terms as are then 
obtainable upon reasonable effort by the Divestiture 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 Section V(D) of this Final Judgment, the 
Divestiture Trustee may hire at the cost and expense of Defendants 
any investment bankers, attorneys, or other agents, who shall be 
solely accountable to the Divestiture

[[Page 52760]]

Trustee, reasonably necessary in the Divestiture Trustee's judgment 
to assist in the divestiture. Any such investment bankers, 
attorneys, or other agents shall serve on such terms and conditions 
as the United States approves including confidentiality requirements 
and conflict of interest certifications.
    C. Defendants shall not object to a sale by the Divestiture 
Trustee on any ground other than the Divestiture Trustee's 
malfeasance. Any such objections by Defendants must be conveyed in 
writing to the United States and the Divestiture Trustee within ten 
(10) calendar days after the Divestiture Trustee has provided the 
notice required under Section VI.
    D. The Divestiture Trustee shall serve at the cost and expense 
of Defendant Tyson, on such terms and conditions as the United 
States approves, including confidentiality requirements and conflict 
of interest certifications. The Divestiture Trustee shall account 
for all monies derived from the sale of the assets sold by the 
Divestiture Trustee and all costs and expenses so incurred. After 
approval by the Court of the Divestiture Trustee's accounting, 
including fees for its services yet unpaid and those of any 
professionals and agents retained by the Divestiture Trustee, all 
remaining money shall be paid to Defendant Tyson and the trust shall 
then be terminated. The compensation of the Divestiture Trustee and 
any professionals and agents retained by the Divestiture Trustee 
shall be reasonable in light of the value of the Divestiture Assets 
and based on a fee arrangement providing the Divestiture 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 Divestiture Trustee and Defendant Tyson are unable 
to reach agreement on the Divestiture Trustee's or any agents' or 
consultants' compensation or other terms and conditions of 
engagement within fourteen (14) calendar days of appointment of the 
Divestiture Trustee, the United States may, in its sole discretion, 
take appropriate action, including making a recommendation to the 
Court. The Divestiture Trustee shall, within three (3) business days 
of hiring any other professionals or agents, provide written notice 
of such hiring and the rate of compensation to the Defendants and 
the United States.
    E. Defendants shall use their best efforts to assist the 
Divestiture Trustee in accomplishing the required divestiture. The 
Divestiture Trustee and any consultants, accountants, attorneys, and 
other agents retained by the Divestiture Trustee shall have full and 
complete access to the personnel, books, records, and facilities of 
the business to be divested, and Defendants shall develop financial 
and other information relevant to such business as the Divestiture 
Trustee may reasonably request, subject to reasonable protection for 
trade secret or other confidential research, development, or 
commercial information, or any applicable privilege for any of the 
forgoing. Defendants shall take no action to interfere with or to 
impede the Divestiture Trustee's accomplishment of the divestiture.
    F. After its appointment, the Divestiture Trustee shall file 
monthly reports with the United States and, as appropriate, the 
Court setting forth the Divestiture Trustee's efforts to accomplish 
the divestiture ordered under this Final Judgment. To the extent 
such reports contain information that the Divestiture 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 
Divestiture Trustee shall maintain full records of all efforts made 
to divest the Divestiture Assets.
    G. If the Divestiture Trustee has not accomplished the 
divestiture ordered under this Final Judgment within six (6) months 
after its appointment, the Divestiture Trustee shall promptly file 
with the Court a report setting forth (1) the Divestiture Trustee's 
efforts to accomplish the required divestiture, (2) the reasons, in 
the Divestiture Trustee's judgment, why the required divestiture has 
not been accomplished, and (3) the Divestiture Trustee's 
recommendations. To the extent such reports contains information 
that the Divestiture Trustee deems confidential, such reports shall 
not be filed in the public docket of the Court. The Divestiture 
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 Divestiture Trustee's 
appointment by a period requested by the United States.
    H. If the United States determines that the Divestiture 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 Divestiture Trustee.

VI. Notice of Proposed Divestiture

    A. Within two (2) business days following execution of a 
definitive divestiture agreement, Defendant Tyson or the Divestiture 
Trustee, whichever is then responsible for effecting the divestiture 
required herein, shall notify the United States and the Plaintiff 
States of any proposed divestiture required by Section IV or V of 
this Final Judgment. If the Divestiture Trustee is responsible, it 
shall similarly notify Defendants. The notice 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 notice, the United States, after consultation with 
the Plaintiff States, may request from Defendants, the proposed 
Acquirer, any other third party, or the Divestiture Trustee, if 
applicable, additional information concerning the proposed 
divestiture, the proposed Acquirer, and any other potential 
Acquirer. Defendants and the Divestiture Trustee shall furnish any 
additional information requested of them 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, any third party, and the Divestiture Trustee, 
whichever is later, the United States shall provide written notice 
to Defendants and the Divestiture 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 Section V(C) of this Final 
Judgment. Absent written notice that the United States does not 
object to the proposed Acquirer or upon objection by the United 
States, a divestiture proposed under Section IV or Section V shall 
not be consummated. Upon objection by Defendants under Section V(C), 
a divestiture proposed under Section V shall not be consummated 
unless approved by the Court.

VII. Financing

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

VIII. Hold Separate

    Until the divestiture required by this Final Judgment has 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 
divestiture ordered by this Court.

IX. Affidavits

    A. Within twenty (20) calendar days of the filing of the 
Complaint in this matter, and every thirty (30) calendar days 
thereafter until the divestiture has been completed under Section IV 
or V, Defendants shall deliver to the United States an affidavit as 
to the fact and manner of its compliance with Section IV or V of 
this Final Judgment. Each such affidavit shall include the name, 
address, and telephone number of each person who, during the 
preceding thirty (30) calendar days, 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 during that period. Each such 
affidavit shall also include a description of the efforts Defendants 
have taken to solicit buyers for the Divestiture Assets, and to 
provide required information to prospective Acquirers, including the 
limitations, if any, on such information. Assuming the information 
set forth in the affidavit is true and complete, any objection by 
the United

[[Page 52761]]

States to information provided by Defendants, including limitation 
on information, shall be made within fourteen (14) calendar days of 
receipt of such affidavit.
    B. 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 VIII 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.
    C. 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.

X. Appointment of Monitoring Trustee

    A. Upon application of the United States, the Court shall 
appoint a Monitoring Trustee selected by the United States and 
approved by the Court.
    B. The Monitoring Trustee shall have the power and authority to 
monitor Defendants' compliance with the terms of this Final Judgment 
and the Hold Separate Stipulation and Order entered by this Court, 
and shall have such other powers as this Court deems appropriate. 
The Monitoring Trustee shall be required to investigate and report 
on the Defendants' compliance with this Final Judgment and the Hold 
Separate Stipulation and Order and the Defendants' progress toward 
effectuating the purposes of this Final Judgment, including but not 
limited to: keeping Tyson Fresh Meats, Inc. separate from the sow 
purchasing operations of Defendant Hillshire.
    C. Subject to Section X(E) of this Final Judgment, the 
Monitoring Trustee may hire at the cost and expense of Defendants 
any consultants, accountants, attorneys, or other agents, who shall 
be solely accountable to the trustee, reasonably necessary in the 
trustee's judgment. Any such consultants, accountants, attorneys, or 
other agents shall serve on such terms and conditions as the United 
States approves including confidentiality requirements and conflict 
of interest certifications.
    D. Defendants shall not object to actions taken by the 
Monitoring Trustee in fulfillment of the Monitoring Trustee's 
responsibilities under any Order of this Court 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 Monitoring 
Trustee within ten (10) calendar days after the action taken by the 
Monitoring Trustee giving rise to the Defendants' objection.
    E. The Monitoring Trustee shall serve at the cost and expense of 
Defendants pursuant to a written agreement with Defendants and on 
such terms and conditions as the United States approves including 
confidentiality requirements and conflict of interest 
certifications. The compensation of the Monitoring Trustee and any 
consultants, accountants, attorneys, and other agents retained by 
the Monitoring Trustee shall be on reasonable and customary terms 
commensurate with the individuals' experience and responsibilities. 
If the Monitoring Trustee and Defendants are unable to reach 
agreement on the trustee's or any agents' or consultants' 
compensation or other terms and conditions of engagement within 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. The Monitoring Trustee shall, within 
three (3) business days of hiring any consultants, accountants, 
attorneys, or other agents, provide written notice of such hiring 
and the rate of compensation to Defendants and the United States.
    F. The Monitoring Trustee shall have no responsibility or 
obligation for the operation of Defendants' businesses.
    G. Defendants shall use their best efforts to assist the 
Monitoring Trustee in monitoring Defendants' compliance with their 
individual obligations under this Final Judgment and under the Hold 
Separate Stipulation and Order. The Monitoring Trustee and any 
consultants, accountants, attorneys, and other agents retained by 
the Monitoring Trustee shall have full and complete access to the 
personnel, books, records, and facilities relating to compliance 
with this Final Judgment, subject to reasonable protection for trade 
secret or other confidential research, development, or commercial 
information or any applicable privileges. Defendants shall take no 
action to interfere with or to impede the Monitoring Trustee's 
accomplishment of its responsibilities.
    H. After its appointment, the Monitoring Trustee shall file 
reports monthly, or more frequently as needed, with the United 
States, and, as appropriate, the Court setting forth Defendants' 
efforts to comply with its obligations under this Final Judgment and 
under the Hold Separate Stipulation and Order. To the extent such 
reports contain information that the Monitoring Trustee deems 
confidential, such reports shall not be filed in the public docket 
of the Court.
    I. The Monitoring Trustee shall serve until the divestiture of 
all the Divestiture Assets is finalized pursuant to either Section 
IV or Section V of this Final Judgment.
    J. If the United States determines that the Monitoring 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 Monitoring Trustee.

XI. Compliance Inspection

    A. For the purposes of determining or securing compliance with 
this Final Judgment, or of any related orders such as any Hold 
Separate 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 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 
counsel present (individual and/or Defendant's counsel), 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 response 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 (i) the executive branch 
of the United States, or (ii) the Plaintiff States, except in the 
course of legal proceedings to which the United States is a party 
(including grand jury proceedings), or 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).

XII. No Reacquisition

    Defendants may not reacquire any part of the Divestiture Assets 
during the term of this Final Judgment.

XIII. 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.

XIV. Expiration of Final Judgment

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

XV. Public Interest Determination

    Entry of this Final Judgment is in the public interest. The 
parties have complied with the requirements of the Antitrust

[[Page 52762]]

Procedures and Penalties Act, 15 U.S.C. Sec.  16, including making 
copies available to the public 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 response 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
[FR Doc. 2014-21102 Filed 9-3-14; 8:45 am]
BILLING CODE 4410-11-P

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