June 4, 2014

JBS backs Pilgrim's Pride's US$7.7-billion offer for Hillshire Brands

  
JBS is backing Pilgrim's Pride's proposal to raise the offer from US$45 per share to US$55 per share in cash for the acquisition of Hillshire Brands, a transaction that will amount to US$7.7 billion.

Last week, Tyson Foods offered US$50 per share, or US$6.2 billion, for Hillshire Brands. Both bids by Pilgrim's Pride and Tyson Foods are contingent on Hillshire abandoning its plan to acquire Pinnacle Foods.

With the two giants locked in a bidding war, Hillshire announced yesterday to hold talks with both companies, AP reported.

Pilgrim's Pride is an American company based in Greeley, Colorado. Brazilian meat giant, JBS, is the controlling shareholder with a 75% stake.

In a company's press release on June 3, JBS expressed its confidence in the Pilgrim's Pride's proposal, saying it is "strategically and financially compelling, and creates considerable value for the shareholders of all involved parties."

According to the statement by JBS, Pilgrim's Pride anticipates run-rate cost synergies in excess of US$300 million annually to come from operational and value-chain efficiencies. In addition, Pilgrim's Pride expects significant growth opportunities in higher margin branded products, both in North America and internationally.