Upon the announcement of today’s offer from Tyson, Pilgrim’s Pride said the company is withdrawing its proposal.

Bill Lovette, Pilgrim’s Pride CEO says the company determined it was in the best interest of its shareholders not to increase its proposed offer.

“Pilgrim’s will maintain its strong focus on operational excellence and shareholder value, while pursuing acquisition opportunities that advance our stated strategy,” Lovette says. “We appreciate the support of our shareholders, customers and team members throughout this process.”

Tyson says the offer is subject to Hillshire Brands being released from its existing agreement to acquire Pinnacle Foods Inc., which Hillshire announced early in May.

“The Hillshire Brands acquisition would represent a defining moment for Tyson Foods,” says Donnie Smith, Tyson’s president and chief executive officer. “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 it is not making any recommendations at this time related to outstanding offers or agreements. The company, which has more than 9,000 employees, reportedly generated sales of about $4 billion in 2013.

According to the company, “Hillshire Brands does not have the right to terminate the merger agreement with Pinnacle Foods on the basis of the Tyson Foods offer or enter into an agreement with Tyson Foods prior to its termination. There can be no assurance that any transaction will result from the Tyson Foods offer.”

Tyson representatives pointed to the strength of Hillshire’s portfolio in the breakfast product market as a critical asset to the company. Furthermore, Tyson says it would expect the company’s pork processing operations to benefit as a result of a stable and constant demand for its raw materials for use in Hillshire products.

Following an acquisition, Tyson expects to see an annual financial benefit of more than $300 million.

“Tyson Foods has a history of growing through strategic acquisition,” says John Tyson, chairman of the board. “It is the view of the board of directors that this is truly a transformational opportunity and one that best fits with our strategic plan while enhancing our margins and creating long-term shareholder value.” 

Tyson says 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.