Like Hogs to the Slaughter

One pig-meat conglomerate buying another isn't typically my stock in trade, but I was intrigued by the recent news of the DOJ levying a $900K fine against Smithfield Farms for gun-jumping in its acquisition of Premium Standard Farms. Root of the problem? During the pre-close HSR waiting period, Premium Standard had submitted several long-term contracts for hog supply to Smithfield for review and approval. Sooey!

While the amount of the fine isn't huge (representing little more than one-tenth of one percent of the $810 million Smithfield paid), what's interesting is how after-the-fact it was. The deal closed nearly 3 years ago.

Lesson one, which isn't really a lesson, because both parties should have known better: Don't ask your acquiror to sign off on ordinary course contracts, even if they ARE large and DO extend beyond the closing date. Aside from the gun jumping risk, there are also significant benefits to the seller in maintaining its operational independence while awaiting the close (optionality in the event the deal goes south; additional motivation for the buyer to close quickly). And while the buyer's interest in making sure it's not saddled with non-economic contracts is obvious, tight operating covenants are a better solution than trying to assert de facto operating control pre-close.

Lesson two: Don't expect that closing the deal is the end of your dealings with the DOJ. If you haven't run a clean process, don't be surprised if the feds come calling long after the closing dinner is a distant memory.

Thoughts on Daily Bike Commuting

I starting riding to work about 18 months ago, right after moving from Redmond to Seattle. A fair weather rider at first, I quickly grew to love the feeling of riding to work. From the exhilarating wakeup of flying downhill in the morning to the mind-cleansing burn of pedaling uphill on the way home, I was hooked. I've moved steadily onward to riding nearly every work day. I rode 180 days in 2009, and would have reached 200 if a mid-April sandboarding accident hadn't sidetracked me for 6 weeks with a broken foot.

While I certainly encourage others to "bike their drive," I'll be the first to acknowledge that my situation is about as perfect as it could be for bike commuting. At only 3.5 - 4 miles each way, riding doesn't take any more time than driving, and is way faster than the bus. Parking a car in my building costs $200 a month. My ride is entirely urban, so I'm not (often) dealing with speeding vehicles. With my morning ride almost all downhill, I don't work up a sweat on the way in. My workplace is very casual, so I can ride in my street clothes. Remove any of these factors and who knows how resolved I'd be?

In any event, the last year has been about removing obstacles to riding. The first of these was heavy rain, which for the first six months of riding kept me off my bike. Quality raingear (including these butt-ugly but effective shoe covers) solved that problem, and I now look forward to riding in the rain. I've also added a Cetma rack up front so I can carry bulky items to and from work and run more errands on my bike.

I've probably reached the maximum potential for riding - business travel, speeches and meetings still conspire to keep me off my bike a few weeks each year, and I won't ride in the snow, given the steepness of my hill and how clueless Seattle drivers are at operating in the stuff. I could get another bike, so mechanical problems - which cost me a handful of rides - aren't a factor. But that's probably more just rationalization for me to get this sweet lime-green Swobo.