Pilgrim’s Pride raises offer to $7.7bn for Hillshire acquisition

Pilgrim’s Pride, a leading producer of poultry in the US, has raised its offer to $55 per share to acquire Hillshire Brands, in a deal which values the company at $7.7bn.

The proposal represents an increase of $1.3bn versus Pilgrim’s initial proposal.

Initially, Pilgrim’s Pride submitted an unsolicited proposal to acquire Hillshire Brands for $45.00 per share in cash, in a deal that valued the company at $6.4bn.

Pilgrim’s noted that the new offer is strategically and financially compelling, and creates considerable value for the shareholders of both companies.

The company expects the combination to be immediately accretive to earnings due to significant synergies and the availability of attractive financing terms.

The transaction would create a leading branded protein-focused company with a strong financial profile, diversified and complementary product portfolios and customer bases, and strong synergy and growth opportunities, while maintaining Hillshire’s presence in Chicago, according to Pilgrim’s Pride.

Pilgrim’s Pride plans to finance the deal with a combination of existing cash balances and new debt financing.

After the initial offer by Pilgrim’s Pride, Tyson Foods submitted an offer to acquire Hillshire for $50 per share in a proposal valued at $6.8bn on 29 May 2014.

These proposals were announced after Hillshire Brands unveiled plans to buy Pinnacle Foods for $4.3bn.

With this move, Pilgrim’s Pride and Tyson Foods are seeking to take advantage of the concerns of some shareholders who have questioned the need for a multi-billion dollar deal for Pinnacle.

Meanwhile, Hillshire Brands has announced that its board has authorised discussions with Pilgrim’s Pride and Tyson Foods regarding their unsolicited proposals.

Formerly known as Sara Lee Corporation, Hillshire Brands is involved in meat-centric food production and foodservice operations and offers consumer brands such as Jimmy Dean, Hillshire Farm, Ball Park, Aidells, Gallo Salame and State Fair.