September 28, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

It was in March 2021 when Louis Dreyfus Company (LDC) agreed to sell the business and related assets of Imperial Sugar Company to Clewiston, Florida-based U.S. Sugar for $315 million. 

Founded in 1843 in Sugar Land, Texas, (which in 1959 based its name on the company), Imperial Sugar is one of the top sugar companies in the U.S. It currently operates a cane sugar refinery at Port Wentworth in Savannah, Georgia, and a sugar transfer and liquification facility in Ludlow, Kentucky, sourcing its sugar from Central and South America as well as from the Caribbean. The deal also includes all of Imperial’s consumer-facing sugar brands, which are mainly sold across the southern U.S. 

For U.S. Sugar, the addition of Imperial Sugar’s refinery business, assets, and brands will supplement its existing 240,000 acres of farmland and its large-scale mill and refinery located in Florida, processing 42,000 tons of sugarcane per day and producing approximately 850,000 tons of refined sugar per year.

However, by November of last year there was a flag on the play when the U.S. Department of Justice (DOJ) filed a civil antitrust lawsuit aimed at blocking the acquisition, alleging that the deal would “leave an overwhelming majority of refined sugar sales across the Southeast in the hands of only two producers.”

But, there was yet another course correction only days ago when a U.S. judge ruled in favor of U.S. Sugar’s plans to buy its rival, rejecting the premise put forth by the DOJ that the proposed consolidation would result in higher sugar prices for consumers and soda manufacturers. 

“The people of U.S. Sugar remain pleased that the federal court ruled in our favor, completely rejecting the Department of Justice’s challenge to our acquisition of Imperial Sugar,” said a spokesperson for U.S. Sugar.

“The ruling is fact-focused and based on the realities of the American sugar industry, highlighting the fact that sugar flows freely across the U.S. and in the geographies in which we operate amidst strong competition. The Department of Justice’s request for a stay so that it can appeal to the Third Circuit rehashes arguments made to, and rejected, by the District Court.  We are confident that the District Court’s ruling will be upheld on appeal.”

“We look forward to expeditiously closing this acquisition as planned, which will increase efficiencies, spur greater competition amongst the industry, decrease U.S. reliance on foreign imported sugar and enhance the local Georgia economy—benefiting customers and consumers across the country.”

Indeed, U.S. Sugar announced its intentions to move forward as quickly as possible to close the transaction, and its plans to invest in upgrading Imperial’s refinery in Savannah, Georgia, noting that it will retain the employees at the site.

Prior to building its Clewiston Refinery in 1998, U.S. Sugar sold and shipped its raw cane sugar to the very Savannah refinery it is now acquiring.

“We are excited about the opportunity to re-establish strong ties with both the people of Imperial and the community of Savannah,” said Robert H. Buker, Jr., president and CEO, U.S. Sugar.

“As an employee and charity-owned company, this acquisition will be good for our current and future employees,” added Buker. “We look forward to proceeding as planned with this acquisition, which will enable us to increase our domestic sugar production, enhance the local Georgia economy, decrease U.S. reliance on foreign imports of sugar, and benefit farmers, customers and consumers across the country.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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