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Pilgrim’s Pride Makes Proposal to Acquire Hillshire Brands

Pilgrim's Pride Corp., Greeley, Colo., announced plans to make a proposal to acquire The Hillshire Brands Co., Chicago, for $45 per share in cash, in a transaction valued at $6.4 billion.

Pilgrim's all-cash proposal provides Hillshire shareholders with a substantially superior alternative to Hillshire's pending acquisition of Pinnacle Foods Inc., representing a 25% premium to the volume weighted average price of Hillshire shares over the 10 trading days following the announcement of the Pinnacle transaction. Further, the transaction represents a compelling value to Hillshire shareholders at 12.5 times Hillshire's trailing adjusted EBITDA, including the $163 million termination fee payable to Pinnacle.

The proposal has the unanimous support of Pilgrim’s board of directors, as well as the support of JBS S.A., the majority owner of Pilgrim's. It is anticipated that the proposed transaction would close in the third quarter of 2014 and would be subject to customary closing conditions and the termination of Hillshire's merger agreement with Pinnacle. Pilgrim's expects to finance the acquisition with a combination of existing cash balances and new debt financing.

The transaction would create a leading branded, protein-focused company with strong, consistent earnings and complementary competencies, such as an attractive portfolio of Pilgrim's and Hillshire brands, including Pierce, Wing Dings, Jimmy Dean, Hillshire Farm, Ball Park and State Fair. Plus, Pilgrim's strong operational efficiency systems and processes align with Hillshire's innovation and marketing capabilities and complements channels with shared culture of partnering with customers and Pilgrim's expertise in foodservice brand and supermarket deli and Hillshire's experience in retail.

"Our proposal creates considerable value for the shareholders of both Pilgrim's and Hillshire," says Bill Lovette, Pilgrim's chief executive officer. "For Hillshire shareholders, our proposal provides a substantial premium, greater certainty and immediate cash value for their shares. We have long respected the Hillshire business, and we are confident that Hillshire's board and shareholders will find our all-cash premium proposal to be superior to the pending acquisition of Pinnacle. For Pilgrim's, the addition of Hillshire's portfolio of iconic brands and broad-based marketing, innovation and distribution expertise will enhance our position as a market leader. With our complementary products, we believe that together Pilgrim's and Hillshire will better serve our combined customer bases for the benefit of all our stakeholders. We look forward to working constructively with Hillshire to sign a definitive merger agreement and quickly realize the benefits of this combination."

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