In other parts of official Washington this week regulators were beginning to stir over the possible merger of agri-giants. While on the river the Army Corps of Engineers was on the receiving end of a scathing report from the Pentagon.
The Pentagon report also found an institutional bias in the Corps toward the approval of construction projects, a tendency to treat shipping companies as customers, and a general disregard for environmental studies when making recommendations.
The report concludes a ten month investigation that started when an Army Corps economist came forward and reported the statistical doctoring.
Another event destined for intense scrutiny is the merger between meat packer I-B-P and whichever company actually ends up buying the Midwest-based packer. There are currently three bidders: Tyson Foods, Smithfield Foods, and a group from within I-B-P itself. Each of the proposals are worth roughly four billion dollars and each carries some baggage, either with current shareholders or anti-trust regulators.
Currently, I-B-P is the county's number one beef processor and the number two pork processor. A merger with the number one chicken processor Tyson Foods would create the world's largest processor of meat products. Tyson claims its proposal creates no anti-trust problems, though farm state senators ARE concerned.
An I-B-P merger with Smithfield raises all kinds of red flags. That union would bring together the largest and second-largest pork processors, creating a company that essentially owns the pork AND beef processing market. Smithfield already owns a six percent share of I-B-P.
The third option is a buyout by a conglomerate consisting of I-B-P executives, investment bankers, and food giant Archer Daniels Midland. The internal bid would NOT cause anti-trust anxiety, but would cause problems with I-B-P shareholders who have criticized the proposal for its low price, 300 million less than the offer made by Smithfield.