June 10--Pilgrim's Pride Corp. pulled out of the bidding war to acquire the
That's a $2 billion escalation in two weeks.
Pilgrim's initially offered $45 per share for the Chicago-based company that makes foods such as Jimmy Dean Sausage. Tyson upped that to $50 per share last week, followed by Pilgrim's moving the needle up to $55 per share in a potential $7.7 billion deal.
"As a disciplined acquirer, we determined that it was in the best interests of our shareholders not to increase our proposed price of $55 per share in cash," said Bill Lovette, Pilgrim's chief executive officer, in a news release. "Pilgrim's will maintain its strong focus on operational excellence and shareholder value, while pursuing acquisition opportunities that advance our stated strategy. We appreciate the support of our shareholders, customers and team members throughout this process."
In its own news release, Tyson Foods president and CEO Donnie Smith stated Monday: "The Hillshire Brands acquisition would represent a defining moment for Tyson Foods. Our strategy has been to grow our prepared foods business, and it has been our aspiration to be a leader in retail prepared foods just as we are in chicken. Now we will have those iconic No. 1 and No. 2 brands in numerous categories."
Pilgrim's Pride is the second largest U.S. chicken processor. Hillshire Brands is a leading company for prepared meat-based products with annual revenue of approximately $4 billion and with about 9,000 employees.
Tyson reports that combining with Hillshire Brands would "reposition Tyson as a clear leader in the retail sale of prepared foods."
"In particular, the strength of Hillshire Brands' products in the breakfast category would allow Tyson to capture opportunities in this attractive and fast-growing day part," according to the release.
Tyson Foods is the world's second largest meat processor after Brazil's JBS SA, JBS USA's parent company. JBS owns about 75 percent of Pilgrim's Pride.