LAST week, Pinnacle Foods Inc. announced that it has implemented its right to terminate the merger agreement with Hillshire Brands Co.
In May, Hillshire had agreed to buy Pinnacle Foods for $4.23 billion, but the Hillshire board of directors recommended walking away from the Pinnacle Foods deal after Tyson Foods Inc. submitted a final bidding proposal last month to acquire Hillshire for $63.00 per share.
In accordance with the terms of the merger agreement, Pinnacle Foods is entitled to a termination fee of $163 million, which it plans to use to reduce debt.
Upon Pinnacle Foods' announcement, Tyson and Hillshire declared that they had entered into a definitive agreement under which Tyson will acquire all of Hillshire's outstanding shares and net debt for a total all-cash transaction valued at approximately $8.55 billion.
The transaction has been unanimously approved by the boards of both companies and is anticipated to close by Sept. 27, the last day of Tyson's fiscal year.
The acquisition of Hillshire will lift Tyson's retail status, especially in the prepared foods category, by adding highly recognized brands such as Jimmy Dean, Ball Park, State Fair and Hillshire Farm to the company's already strong portfolio.
"By investing in Hillshire Brands and its collection of leading brands, we have a unique opportunity to transform an important segment of our business and position Tyson Foods to meet American consumers' growing demand for protein at breakfast and throughout the day," Donnie Smith, Tyson president and chief executive officer, said.
"We operate in a competitive and complex marketplace that demands bold steps to remain an industry leader. I am confident that, together, Tyson Foods and Hillshire Brands have the right products and the right people to create years of enhanced shareholder value and ensure more choices for our customers and consumers," Smith added.