COURT ALLOWS $315 MILLION ACQUISITION OF GEORGIA SUGAR REFINERY TO PROCEED DESPITE ANTITRUST CONCERNS

In recent times, there is a growing risk of antitrust challenges by the government to block middle-market acquisitions, which are buyout transactions ranging from $25 million to $1 billion. In a specific case, a Florida-based sugar producer/refiner successfully overcame such a challenge from the government regarding their $315 million acquisition of the George Sugar Refinery.

The seller in this deal owns a sizable sugar refinery near Savannah, Georgia. Their facility mainly refines imported raw sugar and does not possess any other refineries or assets related to sugar cane farming or milling. On the other hand, the buyer, who grows sugar in Florida, has both a mill and a refinery. However, their refinery accounts for less than 7% of the nationwide capacity.

The buyer and seller entered into an agreement where the buyer would acquire the seller’s assets, primarily the Georgia sugar refinery, for $315 million. However, the United States Department of Justice filed a lawsuit in federal court to block the acquisition. The government argued that the buyer would control around 75% of sugar sales in the Southeastern United States, leading to reduced competition and increased prices for consumers.

Nevertheless, the court dismissed the government’s argument, stating that their proposed geographic markets did not reflect the commercial realities of the sugar industry. The evidence showed that customers already considered alternative options beyond the government’s proposed markets for competitive pricing. Additionally, the court highlighted the government’s control over sugar prices through mechanisms that could be utilized to adjust supply and maintain artificially high prices.

Although the government plans to appeal the decision, the acquisition can proceed and the deal can be finalized.