What do you get when you combine the second-largest chicken producer in the United States and one of the top packaged meat and frozen food companies in the world? The country’s largest producer of meat for breakfast, lunch and dinner. Or to be more accurate, the possible take over of Hillshire Brands Co., by Pilgrim’s Pride.
Colorado-based Pilgrim’s Pride, a top producer of chicken products, announced Tuesday that it made a bid to buy Hillshire Brands, the company known for its sunny Jimmy Dean breakfast commercials and plethora of flavored hot-dogs, for $6.4 billion, the New York Times DealBook reports.
Officials with Pilgrim’s Pride, which is owned by the world’s largest meat producer JBS, anticipate the deal will close by the third quarter of this year and that the two companies would have a combined revenue of $12.4 billion.
Wait — Isn’t Hillshire in the process of acquiring Pinnacle Foods, the company behind brands like Vlasic and Duncan Hines, for $4.2 billion? Not if Pilgrim’s Pride has anything to say about it.
The folks at Pilgrim’s, and some Hillshire investors, don’t think that pending deal provides enough value to Hillshire. Pilgrim’s says it is willing to pay the $163 million termination fee to Pinnacle in order to have that deal called off.
“With our complementary products, we believe that together Pilgrim’s and Hillshire will better serve our combined customer bases for the benefit of all our stakeholders,” Bill Lovette, the chief executive of Pilgrim’s Pride, says in a news release. “We look forward to working constructively with Hillshire to sign a definitive merger agreement and quickly realize the benefits of this combination.”
Hillshire has recently been on a acquisition-spree. The company made two acquisitions in the last 12 months before its announcement to purchase Pinnacle. In April, the company purchased Van’s Natural Foods for $165 million. In September 2013, it purchased gourmet jerky maker Golden Island for $35 million.