But the Justice Department alleges that the deal would hurt competition, particularly in the Southeast United States. The legal challenge is based on antitrust law known as the Clayton Act.

"The merger at issue in this case involves a leading Florida-based sugar refiner's acquisition of its major rival's Georgia-based refinery," Justice Department attorneys wrote in a Nov. 1 brief. "As the government has established, the merger threatens precisely the harm that (a section of the Clayton Act) proscribes: substantially lessening competition in the market for the production and sale of refined sugar."

In its Nov. 21 brief, however, U.S. Sugar said that during a district-court trial the Justice Department "presented overly narrow and inconsistent product and geographic markets in an attempt to distort the competitive impact of United States Sugar Corporation's acquisition of Imperial Sugar Company." It urged the appellate court to uphold the Sept. 23 ruling by Delaware-based U.S. District Judge Maryellen Noreika.

"The record in this case is long and detailed, involving fact-intensive questions about the commercial realities of the U.S. sugar industry," the U.S. Sugar brief said. "The district court's decision turned on extensive findings of fact and credibility determinations. The district court had the opportunity to study the record for months, and to observe and question the witnesses at a four-day trial. The government lost that trial on the facts."