NEW YORK – Tyson Foods Inc. has won a bidding war to gobble up Hillshire Brands, the maker of Jimmy Dean sausages and Ball Park hot dogs.
Tyson had been vying with rival poultry producer Pilgrim’s Pride to acquire Hillshire, which wrapped up its bidding process Sunday.
Tyson’s final offer ended up at $63 a share, about two weeks after Pilgrim’s Pride made an initial bid of $45 a share.
The offer from Tyson is worth $7.75 billion based on Hillshire’s 123 million shares outstanding. Tyson values the deal at $8.55 billion, including debt.
Pilgrim’s Pride, owned by Brazilian meat giant JBS, said Monday it was bowing out of the competition.
Still, the deal is not sealed yet. It is contingent on the termination of Hillshire’s offer to acquire Pinnacle Foods Inc., which makes Birds Eye frozen vegetables and Wish-Bone salad dressings. Pinnacle could choose to cut bait and walk away with $163 million breakup fee, or force the deal to a vote by Hillshire shareholders.
A Pinnacle representative didn’t return a call for comment.
In a conference call with reporters, Tyson CEO Donnie Smith said he was confident the $63 offer would end up being worthwhile for Tyson shareholders, despite how high the price went.
Great brands like Jimmy Dean and Ball Park just don’t become available very often, Smith said.
Hillshire’s stock closed at $36.95 on May 9, the day before the company announced the Pinnacle deal. Shares were up 5 percent at $61.89.
Tyson, like Pilgrim’s Pride, has been looking to boost its presence in brand-name, prepared foods like Jimmy Dean breakfast sandwiches. Those types of products are more profitable than fresh meat, such as chicken breasts, where there isn’t as much wiggle room to pad prices.