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Judge says sugar company merger is legal in case involving United Sugars

United States Sugar Corp., a Florida company that markets sugar cooperatively with Red River Valley sugarbeet growers through United Sugars, wants to purchase Imperial Sugar Co. The U.S. Department of Justice was suing to block the purchase.

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U.S. Sugar Corp., a partner in Minnesota-based United Sugars Corp., announced March 24, 2021, that it will purchase the Imperial Sugar Co., including its big port refinery near Savannah, Georgia, shown above.
Courtesy / United Sugars Inc.
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WILMINGTON, Delaware — A federal judge has ruled that merger between sugar companies will not violate antitrust laws, a ruling with an impact Red River Valley sugarbeet co-ops.

U.S. District Judge Maryellen Noreika of Delaware on Friday, Sept. 23, ruled in favor of United States Sugar Corporation in its bid to acquire Imperial Sugar Company.

The Department of Justice was suing to stop the deal, arguing that consolidation in the sugar business would be bad for consumers, especially those in the southeast U.S., where United States Sugar and Imperial refine cane sugar.

Also named in the lawsuit was Minnesota-based United Sugars Corp. United Sugars is a marketing partnership that includes United States Sugar, as well as three sugarbeet cooperatives: American Crystal Sugar, based in Moorhead, Minnesota; Minn-Dak Farmers Co-op, based in Wahpeton, North Dakota; and Wyoming Sugar.

The U.S. Sugar purchase includes a sugar refinery near the port city of Savannah, Georgia. U.S. Sugar has said it will invest in the refinery, making it and the whole company more efficient. U.S. Sugar attorneys argued that by acquiring Imperial’s retail brands, it will be able to offer products it currently can’t make at its Florida refinery, including brown and powdered sugar, and various sizes of bagged products.

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"The people of U.S. Sugar are pleased that today’s court ruling will allow our acquisition of Imperial Sugar to proceed as planned: enabling us to increase our sugar production, enhance the local Georgia economy and benefit our employees and customers."

The judge's ruling was not immediately made public to protect confidential trade information. The gave the parties until Sept. 29, 2022 to provide a redacted version of the ruling to become public.

Attorneys for the two sides made their arguments during a four-day bench trial in April. The judge then asked the attorneys to file briefs supporting their cases; those were filed in late May.

Imperial Sugar is currently owned by Louis Dreyfus, an international agribusiness based in Holland. The Justice Department for its case cited an Imperial analysis describing U.S. Sugar as a “close competitor,” and that the merger was clearly illegal. It added that, “The acquisition of even a less ‘effective’ competitor can still cause harm.”

The Justice Department also has described competitors in the sugar industry as having "cozy" relationships.

U.S. Sugar announced it would buy Imperial in March 2021. The Justice Department filed its lawsuit in the fall of 2021.

Reach Jeff Beach at jbeach@agweek.com or call 701-451-5651 (work) or 859-420-1177.
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