Tyson Foods Inc. (NYSE:TSN) outbid rivals and sealed a deal to buy Hillshire Brands Co. (NYSE:HSH) for about $7 billion excluding debt in a transaction that gives the buyer a bigger market share in packaged meat products, which provide higher margins than sales to institutional operations like restaurants and other businesses.
The deal values Hillshire, which makes Jimmy Dean sausage, at $63 a share.
The deal is likely to be the largest ever in the meat industry, and marks a victory for Tyson over Brazilian rival JBS SA, the parent company of Pilgrim’s Pride Corp. (NYSE:PPC), the Wall Street Journal reported. Pilgrim’s Pride had started the bidding for Hillshire last month.
Hillshire agreed last month to acquire Pinnacle Foods Inc. (NYSE:PF) in a cash and stock deal valued at $6.6 billion, including debt. Tyson's offer for Hillshire is contingent on a cancellation of the Pinnacle deal.