Tyson’s Pursuit of Hillshire Succeeds


Tyson’s Pursuit of Hillshire Succeeds

Tyson Foods Inc has finally won the takeover bid for Hillshire Brands Co with its all-cash overture that values sausage producer at $8.55 billion. The deal becomes the largest so far for the international meat venture.

Tyson, which is the most dominant meat processor in the US, on Monday, announced a deal to buy Hillshire for $63 for every share. The offer surpassed last week’s $55 from Pilgrim’s Pride that is majority-controlled by Brazilian meat company JBS SA.

The spirited efforts to buy Hillshire highlights how urgently giant meat-processing firms want to prop up more profitable businesses.

“We want to buy this business for what it can become, not just for what it is now. Great brands like Hillshire, Jimmy Dean and Ball Park just don’t come available very often,” Tsyon chief executive Donnie Smith is quoted by Reuters as telling reporters during a conference call.

“We determined that it was in the best interests of our shareholders not to increase our proposed price,” a statement by Pilgrim’s read on Monday. The company’s offer of $45 per share on May 27 triggered the battle for Hillshire.

Investors welcomed the final agreement, propelling Hillshire’s shares up 5.1% to $61.2 in the afternoon session.


Analysts cautioned that the bidding tussle would end with the winner overpaying to acquire Hillshire. It was likely that a merger would give the winner a competitive edge that would be hard for the loser to beat.

As such, Tyson shares plummeted 4.9% as Pilgrim’s lost 6.1%.

But as Chicago Tribune reports, the agreement is subject to Hillshire successfully abandoning its takeover bid for Pinnacle Foods Inc. So far, Hillshire has not retracted its recommendation about its recent proposal to acquire Pinnacle. The company said it did not have the right to end its agreement with Pinnacle on basis of the Tyson offer.

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To contact the reporter of this story; Yashu Gola at yashu@forexminute.com