The Hillshire Brands Company confirmed that Pinnacle Foods Inc. has exercised its right to terminate the previously announced merger agreement between the companies.
On June 16, 2014, in accordance with the terms of the merger agreement, the Hillshire Brands board of directors withdrew its recommendation of the acquisition of Pinnacle Foods following receipt of the unilaterally binding offer from Tyson Foods, Inc. to acquire Hillshire Brands for $63.00 per share. Consistent with its duties, the Hillshire Brands board will promptly review the Tyson offer.
Pinnacle said it will use the termination fee of $163 million to reduce debt.
In May, Hillshire had agreed to buy Pinnacle Foods for $4.23 billion however the company’s board of directors recommended to walk away from the Pinnacle acquisition after Tyson submitted final bidding proposal for the Hillshire Brands Company last month.