US regulator approves Tyson purchase of Keystone

Tyson Foods’ pending acquisition of Keystone Foods from Marfrig Global Foods took a step forward, having gained approval from the U.S. antitrust authority, according to a notice to the market published on Marfrig’s website.

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Faye93, Bigstock
Faye93, Bigstock

Tyson Foods’ pending acquisition of Keystone Foods from Marfrig Global Foods took a step forward, having gained approval from the U.S. antitrust authority, according to a notice to the market published on Marfrig’s website.

In Marfrig’s notice, dated October 8 and signed by Chief Financial and Investor Relations Officer Marco Antonio Spado, other approvals necessary to close the transaction remain to be given. Marfrig further stated that it would keep its shareholders and the market in general updated on any future developments related to the pending acquisition.

In August, Tyson Foods announced that it had reached an agreement to purchase Keystone Foods, the tenth largest broiler company in the United States, from Marfrig Global Foods, for $2.16 billion in cash. Under the agreement, Tyson would acquire six Keystone Foods processing plants and an innovation center in the United States, as well as eight plants and three innovation centers in China, South Korea, Malaysia, Thailand and Australia. The U.S. facilities are located in Alabama, Georgia, Kentucky, North Carolina, Pennsylvania and Wisconsin.

The two companies agreed that the Brazil-based Marfrig would retain the Keystone Foods beef patty processing plant in North Baltimore, Ohio.

At the time the pending acquisition was announced Tyson Foods stated that it expected the deal to close in the middle of fiscal year 2019. Tyson’s fiscal years typically end on the Saturday closest to September 30, according to the company website.

Marfrig Global Foods announced in April its decision to divest of Keystone Foods to leverage its acquisition of the U.S. business, National Beef Packing Company, and also to allow the company to more fully concentrate on its beef operations. The National Beef transaction closed on June 6.

Tyson Foods is already the largest broiler company in the United States, and once the acquisition of Keystone Foods is finalized, it will further solidify Tyson Foods’ leading position. Tyson produced 174.8 million pounds of ready-to-cook chicken on a weekly basis in 2017, according to the WATTAgNet Top Poultry Companies Database. Keystone, the tenth largest broiler company in the U.S., processed 23.8 million pounds of ready-to-cook chicken on a weekly basis in 2017.

According to the 2017 figures, Tyson processed 20.6 million more pounds of ready-to-cook chicken weekly than its closest competitor Pilgrim’s Pride. The addition of Keystone Foods would extend Tyson’s lead to 44.4 million pounds per week, based off of 2017 statistics.

Tyson Foods recently named Noel White as its president and CEO.

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