Mergers & Acquisitions
Cargill, Continental Grain to acquire Sanderson Farms
Cargill and Continental Grain have formed a joint venture to acquire Sanderson to create a leading U.S. poultry company
Cargill, Continental Grain Company and Sanderson Farms, Inc. have reached a definitive agreement for a joint venture between Cargill and Continental Grain to acquire Sanderson Farms for $203 per share in cash. This represents a total equity value for Sanderson Farms of $4.53 billion.
Upon completion of the transaction, Cargill and Continental Grain will combine Sanderson Farms with Wayne Farms, a subsidiary of Continental Grain, to form a new privately held poultry business. The new company will have state-of-the-art operations and will continue to invest in its workforce and in employee safety. Operations will include poultry processing plants and prepared foods plants across Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, and Texas.
The purchase price represents a 30.3% premium to Sanderson Farms’ unaffected share price of $155.74 on June 18, 2021, the last full trading day prior to media speculation about the potential sale of Sanderson Farms; a 22.8% premium to the Sanderson Farms 30-day volume weighted average price (VWAP) as of June 18, 2021, and a 15.2% premium to the all-time high share price as of June 18, 2021.
“We are very happy to partner with Cargill with whom we have had a decades-long relationship between two family-owned companies,” says Paul Fribourg, chairman and CEO of Continental Grain. “Sanderson Farms’ operations, best-in-class assets and valuable brand have underscored their success, and we have the highest respect for Joe Sanderson, and the business and team he has built as the third generation CEO. Wayne Farms has been one of the most important and successful parts of Continental Grain for almost 60 years, so bringing together two great partners with two great poultry companies will ensure good things for our customers, our grower partners, and our employees.”
“At Cargill, we are committed to nourishing the world in a safe, responsible and sustainable way,” says David MacLennan, chairman and CEO of Cargill. “Expanding our poultry offerings to the U.S. is a key enabler of our ability to meet customer and consumer demands. With these great businesses, and our strong partnership, we believe we will deliver a superior portfolio of products and services to our customers.”
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