Tyson Foods offers $6.8 B for Hillshire Brands; Pilgrim’s Pride raises bid

June 3, 2014

Two days after Pilgrim’s Pride made its proposal to acquire Hillshire Brands for $6.4 billion, Tyson Foods Inc. has offered $6.8 B to acquire Hillshire Brands. The Tyson proposal would provide Hillshire shareholders with an immediate and significant return on their investment in Hillshire and, according to Tyson, constitutes a significantly superior alternative to Hillshire’s previously announced agreement to acquire Pinnacle Foods Inc.

The combination of Tyson and Hillshire would reposition Tyson as a leader in the retail sale of prepared foods, with a complementary portfolio of well-recognized brands and private label products, including Tyson, Wright Brand, Jimmy Dean, Ball Park, State Fair, and Hillshire Farm. In particular, the company believes that the strength of Hillshire’s products in the breakfast category would allow Tyson to capture opportunities from shifting consumer trends in this attractive and fast-growing daypart where Tyson has little presence today.

“We believe that there is a strong strategic, financial and operational rationale for the combination of Tyson and Hillshire,” said Donnie Smith, Tyson Foods President and CEO. “Our proposal provides Hillshire shareholders with an immediate cash premium for their shares that we believe is both greater and more certain than what can be attained in the near term by the company either on a standalone basis or in combination with any other food processing company.”

This proposal has the unanimous support of the Tyson Board of Directors and is subject to the termination of Hillshire’s merger agreement with Pinnacle.

As it did with the Pilgrim’s Pride proposal, Hillshire Brands released the following statement: “Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisors, Hillshire Brands’ Board will thoroughly review the Tyson Foods proposal.”

On June 1, Pilgrim’s Pride revised its proposal bid to $55.00 per share—a transaction valued at $7.7 billion. This is up from its initial bid of $6.4 billion on May 27.

Tyson press release

Hillshire statement

Pilgrim’s Pride press release