Tyson Foods on May 29 proposed an all-cash offer to acquire Hillshire Brands for $6.8 billion or $50 per share. The move comes just two days after rival poultry company Pilgrim’s offered to purchase Hillshire Brands for $6.4 billion or $45 per share.

Tyson’s proposal, like the one presented by Pilgrim’s, is contingent upon Hillshire Brands withdrawing its plans to purchase Pinnacle Foods.

The combination of Tyson and Hillshire would reposition Tyson as a clear leader in the retail sale of prepared foods, Tyson Foods stated, with a portfolio of well-recognized brands and private label products, including Tyson, Wright Brand, Jimmy Dean, Ball Park, State Fair and Hillshire Farm. The management of Tyson Foods believes that the strength of Hillshire’s products in the breakfast category would allow Tyson to capture opportunities in a fast-growing food industry segment where Tyson currently has limited presence.

“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 CEO. “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 stand-alone basis or in combination with any other food processing company.


“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.”

The potential transaction would provide Tyson with the chance to realize significant synergies through the combination of the two companies’ sales and marketing teams, significant distribution and supply chain resources, and alignment of shared service functions. 

Tyson expects that the proposed transaction would be accretive to earnings per share in the first full year after completion.

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 JPMorgan Securities LLC in the very near future. The proposal has the unanimous support of the Tyson Board of Directors.