Update: Tyson and Hillshire finalized the deal

Pinnacle Foods terminates Hillshire Brands merger, clearing the way for Tyson and Hillshire to finalize agreement

Last week, Pinnacle Food Inc. announced it has implemented its right to terminate the merger agreement with Hillshire Brands Company.

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 Foods, Inc. submitted final bidding proposal of $63.00 per share for the Hillshire Brands Company last month.

In accordance with the terms of the merger agreement, Pinnacle Food is entitled to a termination fee of $163 million which the company plans to use in order to reduce debt.

Upon Pinnacle’s announcement, Tyson and Hillshire declared the two companies have entered into a definitive agreement.  Tyson will acquire all outstanding shares of Hillshire Brands and outstanding net debt for total all-cash transaction valued at approximately $8.55 billion. The transaction has been unanimously approved by the boards of directors of both companies and is anticipated to close by September 27, 2014, the last day of Tyson Foods’ fiscal year.

“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,” said Donnie Smith, president and chief executive officer of Tyson Foods. “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.”

The attainment of Hillshire Brand will lift Tyson Foods’ retail status especially in the prepared foods category by adding highly-recognized brands such as Jimmy Dean, Ball Park, State Farm and Hillshire Farm to the company’s already strong portfolio. 

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