Meat and Poultry Industry News

Tyson makes bid for Hillshire Brands

May 29, 2014
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Tyson Foods Inc. today announced that it proposes to acquire The Hillshire Brands Company for $50.00 per share in cash. Tyson said in a statement that its proposal would provide Hillshire shareholders with an immediate and significant return on their investment in Hillshire and constitutes a significantly superior alternative to Hillshire’s previously announced agreement to acquire Pinnacle Foods Inc. Tyson’s proposed price represents a 35% premium to the unaffected closing price per share of the Company’s common stock on May 9, 2014, the day prior to the announcement of Hillshire’s proposed agreement to acquire Pinnacle.  At a total value of $6.8 billion, the Tyson proposal represents a multiple of 13.4x Hillshire’s trailing LTM adjusted EBITDA.



Tyson said that the combination of the two companies would reposition Tyson as a clear 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, we believe 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,” it said 

“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 Chief Executive Officer. “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.”

Smith continued, “Tyson’s shareholders will benefit from the considerable new opportunities that come with this extraordinary strategic fit. We stand ready to work together with Hillshire’s leadership to quickly reach an acceptable definitive merger agreement, and look forward to being able to welcome Hillshire’s communities, employees and business partners to the Tyson family.”

There is no financing condition to the proposal, as Tyson has secured a fully committed bridge facility from Morgan Stanley Senior Funding, Inc., which Tyson expects will be joined by JP Morgan Securities LLC in the very near future.  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.

Hillshire Brands, which responded yesterday that it was reviewing the proposal from Pilgrim’s Pride for $45/share, has not yet issued a statement regarding the Tyson proposal.

UPDATE: Hillshire Farms has responded to the Tyson acquisition proposal with 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."

Source: Tyson Foods Inc.; Hillshire Brands Co.

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