A state judge in Delaware ruled Friday that Springdale, Ark.-based Tyson Foods Inc. improperly broke off plans to purchase meat packer IBP, and must proceed with its original plan to merge the two companies.

Tyson trumped a January 2001 merger agreement between Smithfield Foods and IBP agreeing to buy IBP for $3.2 billion and assume $1.5 billion in IBP debt. But after IBP’s subsidiary DFG Foods forced IBP to take a $60.4 million charge on its fourth-quarter earning, Tyson called off the deal on March 29, 2000 citing accounting irregularities in IBP’s reporting of earnings. Following the deal-ending announcement, IBP filed suit in Delaware Chancery Court to enforce the deal's terms.

Speculating on what the impact of the ruling would mean for both companies, one popular theory is that Tyson would have to buy its way out of the deal. However the USAToday newspaper reports that Tyson Foods will try to complete its $3.2 billion acquisition of IBP rather than fight the ruling.

Officials from both companies met Sunday in what Tyson called a "positive and productive" meeting to try to move forward on the deal. If successful the merger would create a meat processing powerhouse with 30 percent of the beef market, 33 percent of the chicken market and 18 percent of the pork market.

"As I first said in December, combining the operations of Tyson and IBP will create a protein company with unmatched reach," John Tyson, Tyson's chairman and chief executive said in a statement. "The management of both Tyson and IBP continue to believe the combination of these two companies is a great strategic and financial decision."