010202 Tyson: Justice Department OKs IBP Buy

Little Rock, AR - The Justice Department has cleared the way for Tyson Foods to proceed with its $3.2 billion acquisition of IBP, Tyson spokesman Ed Nicholson said.

The Springdale, Ark-based company said the waiting period for federal regulatory review had expired without any further action by the Department of Justice.

“This is just one more hurdle we've had to cross,” Nicholson said.

John Tyson, chairman, president and chief executive officer, said the poultry heavyweight had always been confident that the combination of Tyson's poultry business with the beef and pork processing operations of IBP “would not hamper the competitive nature of our markets or restrict sales opportunities for farmers and ranchers.”

The next hurdle, and one that has slowed the merger, is a review of the South Dakota company's financial records by the Securities and Exchange Commission.

Tyson extended its tender offer to IBP shareholders last week after learning of the SEC review. The company first extended its offer on Jan. 17 to give the Justice Department more time to review the transaction. The offer is now good until Feb. 7.

“For the time being at least, our terms and conditions of the cash tender offer remain in effect and unmodified,” Nicholson said. “But these SEC concerns will have to be addressed before the transaction is closed.”

IBP officials declined to comment specifically about the SEC's inquiry but say the questions involve previous account filings and acquisitions by IBP.

When asked how the SEC's inquisition will affect Tyson's purchase of the company, IBP spokesman Gary Mickelson says “You'll have to talk to Tyson about that.”

Mickelson said IBP management filed its response Friday to SEC questions, and company officials met with the SEC Monday to discuss other issues related to its finances.

Mickelson said the IBP Special Committee made up of individual board members received the SEC letter Dec. 29, but did not disclose it to IBP management until Jan. 8. The wait is a mystery, he said.

A call to counsel representing the special committee was not immediately returned Monday.

Tyson reached a deal Jan. 1 to buy IBP. If the acquisition is successful, Tyson will become the nation's leading poultry, beef and pork producer.

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