Chicken processor Pilgrim's Pride Corporation (NASDAQ:PPC) will pay $110.5 million to the U.S. Justice Department and acknowledge wrongdoing as part of a price-fixing investigation, The Wall Street Journal reported.
What Happened: Pilgrim will be the first chicken processor to acknowledge in court that it's guilty of price-fixing, according to WSJ.
American prosecutors have been investigating whether Pilgrim and other chicken processors drove up poultry prices, leading consumers and fast-food chains to pay more for the protein.
As part of the plea, Pilgrim will not face further charges and the Justice Department won't force the company to accept an outside compliance monitor, the report said. There will also be no restitution or probationary period as part of the settlement.
A Justice Department spokeswoman did not respond to WSJ's request for comment.
Pilgrim CEO Fabio Sandri said the agreement provides certainty.
"We are encouraged that today's agreement concludes the Antitrust Division's investigation into Pilgrim's," the CEO said.
Why It's Important: Pilgrim isn't the first entity to plead guilty to price-fixing. Current and former employees at rival chicken companies, including Tyson Foods, Inc. (NYSE:TSN) have already been charged with price-fixing.
The Justice Department alleged that sales officials at different companies gathered and encourage each other to set prices higher, according to WSJ.
What's Next: Pilgrim will make an initial appearance in court on Thursday, at which point it will likely confirm a guilty plea.
PPC Price Action: The stock was trading 5.55% higher at $16.54 at last check Wednesday.
Photo by Michael Barera via Wikimedia.