041145 Smithfield Foods Penalized in IBP Stock Case

Norfolk, VA - Smithfield Foods Inc. agreed to pay a $2 million civil penalty to settle government accusations the nation's No. 1 hog producer violated antitrust laws as it was buying stock in rival meat company IBP Inc., the U.S. Justice Department announced.

The Justice Department said the penalty settles charges the company twice failed to comply with pre-merger notification requirements before making certain acquisitions of stock of IBP, formerly an independent company, now owned by Tyson Foods, and the second largest pork producer when Tyson was buying its stock.

The settlement, filed in U.S. District Court and subject to a judge's order, stems from a $5.47 million claim the government sought in February 2003. In agreeing to the settlement, Smithfield Foods admits no wrongdoing, the company said in a statement.

"Although we remain convinced that Smithfield complied fully with the law, we agreed to settle the matter to avoid the risk and expense of further litigation," Richard J.M. Poulson, the company's executive vice president and senior adviser to the president, said in a statement.

Smithfield maintains it properly made the acquisitions because they were solely for investment. The Justice Department maintains, however, that the acquisition of stock in a firm considered a takeover target or merger partner is not exempt from the filing requirements.

IBP, the biggest red-meat packer in the world, was acquired by Tyson Foods in 2001. In Nebraska, Tyson's former IBP properties including offices, plants, warehouses, tanneries and other operations in Columbus, Dakota City, Lexington, Madison, Norfolk, Omaha, West Point and York.

RETURN TO HOME PAGE

E-mail: sflanagan@sprintmail.com