Tyson Hit With Antitrust Lawsuit Over Alleged Buyout Scheme

Tyson Foods Inc. is facing federal antitrust litigation in Atlanta over claims it inked exclusive agreements with two poultry processors as part of a scheme to strong-arm a regional “renderer” into a below-market buyout.

The lawsuit, docketed Thursday, accuses Tyson of reaching deals with Koch Foods Inc. and Wayne Farms LLC—the top suppliers of chicken waste for American Proteins Inc. and buyers of its livestock feed—that were structured to give Tyson “a contractual out” if the plan failed to pressure API into a sale.

Tyson affiliates then approached API and warned they would either buy it out or “ruin the ...