Some 18 agricultural and environmental groups on Jan. 22 sent a letter to the US Federal Trade Commission (FTC) and the Department of Justice (DOJ) urging them to “thoroughly investigate, and, if evidence warrants, to take action against” Koch Industries’ planned $3.6 billion acquisition of OCI Global’s Iowa Fertilizer Co. (IFCO), announced in December (GM Dec. 22, 2023).
“IFCO was built with substantial local, state, and federal investment, with its proponents citing the opportunity to challenge Koch Industries’ dominance in fertilizer markets,” said the letter. “Should the acquisition be allowed to proceed, taxpayers will have effectively subsidized the expansion of Koch’s control over a critical and heavily concentrated sector of our agricultural economy.”
The groups noted that the plant was proposed in 2012 and it was anticipated to decrease fertilizer costs for farmers by introducing competition into the highly consolidated fertilizer industry.
“The promise of jobs and a stable, domestic source for nitrogen enabled the plant to garner the largest tax incentive package in Iowa’s history: $133 million in local giveaways, another $112 million in state giveaways, and an estimated $300 million in federal tax giveaways,” the letter said.
“The unrestricted federal funds left the door open for Koch Industries to purchase the company just six years after the plant opened,” the letter continued. “While we would harbor grave concerns about any acquisition that further consolidates an agricultural sector as concentrated and as critical as fertilizer, those concerns are much more serious given this deal involves hundreds of millions in taxpayer dollars.”
The groups noted that FTC and DOJ’s recently updated merger guidelines containing language pertinent to the proposed acquisition. One guideline is that “Mergers Raise a Presumption of Illegality When They Significantly Increase Concentration in a Highly Concentrated Market,” and another is “Mergers Can Violate the Law When They Entrench or Extend a Dominant Position.”
“Fertilizer is one of the most highly consolidated sectors in American agriculture, with the top four firms collectively controlling 75% of fertilizer markets,” the groups said in the letter. “Koch Industries is in fact one of these four fertilizer firms, in addition to being one of the largest privately held companies in the country.”
The letter was signed by 20/20 Vision, American Economic Liberties Project, American Grassfed Association, Campaign for Family Farms and the Environment, Family Farm Defenders, Farm Action, Farm and Ranch Freedom Alliance, Food & Water Watch, Iowa Citizens for Community Improvement, Institute for Agriculture and Trade Policy, Institute for Local Self-Reliance, National Family Farm Coalition, National Farmers Union, Open Markets Institute, R-CALF USA, Revolving Door Project, Sooner Food Group, and Union of Concerned Scientists.