Tyson Foods, Hillshire Brands Announce Definitive Merger Agreement
Tyson Foods, Inc., Springdale, Ark., and The Hillshire Brands Co., Chicago, entered into a definitive agreement under which Tyson Foods will acquire all outstanding shares of Hillshire Brands for $63 per share. The all-cash transaction is valued at approximately $8.55 billion, including Hillshire Brands’ outstanding net debt. In addition, Tyson Foods will be making, on behalf of Hillshire Brands, a payment of the $163 million termination fee associated with the termination of Hillshire Brands’ merger agreement with Pinnacle Foods Inc. Hillshire Brands’ board of directors accepted the notice of termination received from Pinnacle Foods and the previously announced transaction was terminated.
“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,” says 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.”
The combination of Tyson Foods and Hillshire Brands will reposition Tyson as a clear leader in the retail sale of prepared foods, including Tyson, Wright, Jimmy Dean, Ball Park, State Fair and Hillshire Farm brands. 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.
“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,” says Sean Connolly, president and CEO of Hillshire Brands. “Importantly, this is a testament to the tremendous value our talented team of employees has created over the past few years by strengthening our brands in the eyes of consumers. 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.”
“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,” adds Smith. “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.”