Justice Department, States Sue to Block Beef Merger

The Justice Department has joined 13 states in suing to block a merger that would make the world’s largest beef processor much larger.

JBS, of Brazil, wants to acquire National Beef Packing of Kansas City, Mo. For $560 million. National is the fourth-largest such operation in the United States. The Justice Department says the deal would push up prices for consumers and push down prices for cattle ranchers and feedlot operators.

JBS has announced a deal to by the country’s fifth-largest producer, Smithfield Beef Group, for about the same price, but apparently Justice has no problem with that.

The National deal would result in 80 percent of the country’s meatpacking capacity in the control of just three companies: JBS, Tyson Foods and Cargill, Justice officials said.

JBS is the third-largest processor in the United States. It purchased Swift in 2007 for $225 million.

Officials from National said they would fight the suit.

In testimony that bordered on the ludicrous, JBS’s North American chief, Wesley Batista, told Congress in May that the merger would create more jobs and more competition.