- THE MAGAZINE
- FOOD MASTER
After a back and forth bidding war with Pilgrim’s Pride, poultry titan Tyson Foods, Inc. announced today it is ready to purchase Hillshire Brands for a cash offer of $63 per share.
The deal, valued at $8.55 billion including Hillshire debt, tops Tyson’s original $50-per-share offer and both offers by Pilgrim’s Pride which increased its offer last week to $55 per share. All offers were unsolicited by Hillshire and began about two weeks ago with the initial offer from Pilgrim’s Pride.
Upon the announcement of today’s offer from Tyson, Pilgrim’s Pride said the company is withdrawing its proposal.
Tyson said the offer is subject to Hillshire Brands being released from its existing agreement to acquire Pinnacle Foods Inc.
“The Hillshire Brands acquisition would represent a defining moment for Tyson Foods,” said Donnie Smith, Tyson’s president and chief executive officer in a statement. “Our strategy has been to grow our prepared foods business, and it has been our aspiration to be a leader in retail prepared foods just as we are in chicken. Now we will have those iconic #1 and #2 brands in numerous categories.”
Chicago-based Hillshire, which includes brands such as Hillshire Farms, Ball Park and Jimmy Dean, confirmed it received the offer from Tyson, but was clear no decision by its board has been made and is not making any recommendations at this time relating to outstanding offers or agreements.
Tyson representatives pointed to the strength of Hillshire’s portfolio in the breakfast product market as a critical asset to the company.
Following an acquisition, Tyson expects to see an annual financial benefit of more than $300 million.
Tyson said the offer was unanimously approved by its board and will remain in effect until Dec. 12, which is the final termination date of the Hillshire Brands agreement with Pinnacle.
Based in Arkansas, Tyson Foods is one of the world’s largest processors and marketers of chicken, beef and pork with about 115,000 employees serving customers in 130 countries.