- POSTED: 09 Jun 2014 21:31
- UPDATED: 10 Jun 2014 01:04
US meat giant Tyson Foods won the bidding war to take over sausage maker Hillshire Brands on Monday, when its sharply increased bid forced Brazilian-owned rival Pilgrim's Pride to pull out.
NEW YORK: US meat giant Tyson Foods won the bidding war to take over sausage maker Hillshire Brands on Monday, when its sharply increased bid forced Brazilian-owned rival Pilgrim's Pride to pull out.
Tyson submitted a US$63 a share all-cash offer, topping Pilgrim's Pride's previous US$55 bid, and Pilgrim's, mainly a chicken processor, withdrew from the two-week-old fight.
Locked in the low-margin meat processing industry, both companies were seeking to move downstream into branded, processed foods where profits are higher and income more stable.
Tyson's bid was worth US$8.6 billion, including the assumption of Hillshire debt, far above the US$6.4 billion first offered on May 27 by Pilgrim's Pride.
Hillshire, which makes Jimmy Dean sausages and Ball Park hot dogs, acknowledged the new offer, while refraining from saying it had been accepted.
To allow the Tyson takeover to go through, Hillshire must first undo its own early May commitment to take over another branded foods business, Pinnacle Foods.
Tyson has said its offer is contingent on Hillshire cancelling the takeover of Pinnacle, which is now expected given Tyson's increased offer.
"The Hillshire Brands acquisition would represent a defining moment for Tyson Foods," said Donnie Smith, Tyson's president and chief executive officer.
"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 number one and number two brands in numerous categories."