Companies and Brands

Tyson Wins Hillshire for $8.55 Billion

chicks
Thinkstock
The bidding was fast and furious, and from the point of view of Hillshire Brands Inc. (NYSE: HSH), very satisfying. Tyson Foods Inc. (NYSE: TSN) announced Monday morning that it has submitted a “unilaterally binding offer” to acquire all the shares of Hillshire for $63 a share, some $8 a share more than the most recent offer from Pilgrim’s Pride Corp. (NYSE: PPC).

The offer is subject to the condition that Hillshire terminate its offer to acquire Pinnacle Foods Inc. (NYSE: PF) in a transaction worth about $6.6 billion. The announcement does not indicate how long that will take. Hillshire’s offer for Pinnacle included a $163 million breakup fee, which Tyson presumably will pay when the deal is completed.

Hillshire owns some of the most well-recognized brands in the processed food industry. Sara Lee, Jimmy Dean and Ball Park are iconic Hillshire brands, and Pilgrim’s Pride’s majority owner, Brazil’s JSB, wanted the brands badly, but not as badly as Tyson.

Tyson said the transaction will be funded with cash on hand and a bridge loan from Morgan Stanley and J.P. Morgan Securities. The company also said it expects to maintain its investment grade credit rating and is prepared to issue new debt and equity “as is prudent.” Tyson expects annual synergies of more than $300 million and also expects the transaction to be marginally accretive to earnings per share in the first year after the deal is completed and “substantially accretive” in following years.

Tyson’s offer has pushed Hillshire’s shares up about 5% in Monday’s premarket trading to $61.83. Shares were trading around $37 before Pilgrim’s Pride’s first offer for Hillshire in late May.

Tyson shares traded down about 2.7%, at $39.05 in a 52-week range of $24.74 to $44.24.

ALSO READ: Hillshire Brands Bidding War: Patience Paying Off for Sara Lee Investors

Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)

Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.

Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.

Click here now to get started.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.