Tyson, Hillshire Sign Definitive Merger Agreement

Tyson, Hillshire Sign Definitive Merger Agreement

Board of directors for both companies approve merger agreement; Companies expected a September close for the deal

Tyson Foods and Hillshire Brands on Wednesday announced a definitive agreement under which Tyson Foods will acquire all outstanding shares of Hillshire Brands for $63 per share.

The all-cash transaction is valued at approximately $8.55 billion, including Hillshire Brands' outstanding net debt. In addition, Tyson Foods will be making, on behalf of Hillshire Brands, a payment of the $163 million termination fee associated with the termination of Hillshire Brands' merger agreement with Pinnacle Foods Inc.

The board of directors of Hillshire Brands has accepted the notice of termination received from Pinnacle Foods and the previously announced transaction has been terminated.

Hillshire Brands food products are seen on a store shelf on May 29, 2014 in Miami, Florida. (Photo by Joe Raedle/Getty Images)

Related: Meat Meet: Pilgrim's Pride Makes Play for Hillshire Brands

Donnie Smith, president and CEO of Tyson, said the deal will allow the two companies to "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 combination of Tyson Foods and Hillshire Brands will reposition Tyson as a leader in the retail sale of prepared foods, with a complementary portfolio of well-recognized brands, including Tyson, Wright, Jimmy Dean, Ball Park, State Fair and Hillshire Farm, a Tyson statement said.

In particular, the strength of Hillshire Brands' products in the breakfast category will allow Tyson Foods to capture opportunities in this attractive and fast-growing day part.

"After thoughtful consideration, our board of directors concluded that a combination with Tyson Foods represents a unique opportunity to provide shareholders with significant and immediate value while also positioning our business for continued success," commented Sean Connolly, president and chief executive officer of Hillshire Brands.

Related: Tyson's Bid for Hillshire Brings Anti-Trust Concern

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.

Pursuant to the definitive agreement, a subsidiary of Tyson Foods will commence a tender offer for 100% of the outstanding shares of Hillshire Brands common stock for $63 per share in cash. The tender offer is required to be commenced within 10 business days and to remain open for at least 20 business days after launch.

Following successful completion of the tender offer, any shares not acquired in the tender offer will be acquired in a second-step merger at the same $63 per share cash price.

Related: Tyson's Offer for Hillshire Prevails; Pilgrim's Withdraws

Closing of the tender offer is conditioned upon customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and there being validly tendered and not withdrawn a number of shares of Hillshire common stock equal to at least two-thirds of the total outstanding shares of Hillshire common stock.

The offer is not subject to any financing condition.

Source: Tyson

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