Tyson reached an agreement to acquire Hillshire Brands in deal valued at $8.55 billion that includes Tyson paying a $163 termination fee to Pinnacle Foods, a company Hillshire was in the process of acquiring.
Tyson said it will pay $63 a share for Hillshire in an all cash deal that makes the world’s largest protein producer an even more dominant player on the global food stage.
"By investing in Hillshire Brands and its collection of leading brands, we have a unique opportunity to transform an important segment of our business, and position Tyson Foods to meet American consumers' growing demand for protein at breakfast and throughout the day," said Donnie Smith, president and CEO of Tyson Foods. "We operate in a competitive and complex marketplace that demands bold steps to remain an industry leader. I am confident that together Tyson Foods and Hillshire Brands have the right products and the right people to create years of enhanced shareholder value and ensure more choices for our customers and consumers."
In a statement, Tyson said the combination with Hillshire Brands will reposition the company as a clear leader in the retail sale of prepared foods, with a complementary portfolio of well-recognized brands, including Tyson, Wright, Jimmy Dean, Ball Park, State Fair and Hillshire Farm. In particular, the strength of Hillshire Brands' products in the breakfast category will allow Tyson Foods to capture opportunities in this attractive and fast-growing day part, the company said.
"After thoughtful consideration, our board of directors concluded that a combination with Tyson Foods represents a unique opportunity to provide shareholders with significant and immediate value while also positioning our business for continued success,” said Hillshire Brands president and CEO Sean Connolly. “I am confident that we have found an excellent partner in Tyson. We firmly believe that our combined global platform will be extremely well positioned to capitalize on the substantial growth opportunities in this market in the years ahead."
Tyson CEO Smith added, “We are confident that the two companies can learn a great deal from each other, and we recognize that Hillshire Brands' value comes from its people, brands and processes. As we begin planning how to bring these companies together, we intend to proceed in a thoughtful manner that honors the strengths embedded in both cultures that have made each of them successful."