Tyson Foods joins fight for Hillshire Brands with $6.8-billion bid

Hillshire Farm sausage on display at a grocery store in Palo Alto in January 2011.
(Paul Sakuma / Associated Press)
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Tyson Foods Inc. on Thursday joined the war to buy Hillshire Brands Co. with an unsolicited acquisition offer of $6.8 billion.

That beats a competing bid for Hillshire, the maker of Ball Park franks and Jimmy Dean sausage links, that came earlier this week from Pilgrim’s Pride. That offer was $45 a share, or about $6.4 billion including the assumption of debt.

Springdale, Ark.-based Tyson said it was offering $50 a share in cash. The deal, however, is contingent on Hillshire ending an agreement announced earlier this month to buy Pinnacle Foods.


Hillshire had announced the Pinnacle offer, worth about $6.6 billion, in an effort to move the company into other food categories. Now the Chicago company is finding itself the target of a bidding war between two competing firms.

Tyson, the second-largest producer of pork in the U.S., is trying to expand the company beyond its meat business and into higher-margin packaged foods.

In a statement, Tyson said the deal would allow the company to “capture opportunities from shifting consumer trends” in areas where it has “little presence today.”

“We believe that there is a strong strategic, financial and operational rationale for the combination of Tyson and Hillshire,” Chief Executive Donnie Smith said in the statement. “Our proposal provides Hillshire shareholders with an immediate cash premium for their shares.”

Smith, in a letter to Hillshire Chief Executive Sean Connolly, explained that fast-moving events had driven Tyson to make its offer public.

“We would have preferred to make this proposal to you privately,” he wrote. “But in light of current circumstances we believe it is in the best interests of your and our shareholders to have current and accurate information.”


Now Pilgrim’s Pride must decide whether it wants to sweeten its offer to Hillshire and fully engage in a bidding war with Tyson.