[Mergers] It's a sausage party!

[Isgrimnur]

Reuters

Poultry producer Pilgrim's Pride Corp PPC.O said it offered to buy Hillshire Brands Co HSH.N for $5.52 billion, a deal that could add pork and beef products such as Jimmy Dean sausages and Hillshire lunch meats to its portfolio.

A deal will bolster the world's second-largest chicken producer's presence in the frozen or chilled sections of supermarkets.

The offer also shows that Brazilian meatpacking giant JBS SA JBSS3.SA, which owns about 75 percent of Pilgrim's, is back to aggressive dealmaking as stronger operating profits have brought down its debt levels.

Pilgrim's offer comes days after Hillshire proposed to buy Pinnacle Foods Inc PF.N, known for its Birds Eye frozen vegetables and Duncan Hines cake mixes, in a $4.3 billion deal.
...
Lovette said a deal would make Pilgrim's one of the top two protein and branded food companies in the United States. The companies had a combined revenue of $12.4 billion in the last 12 months.

A buying spree starting in 2005 built JBS into the world’s biggest beef producer with more than 14 major acquisitions in six years, including U.S. rivals Swift, Smithfield Beef and Pilgrim’s Pride.

[Isgrimnur]

How about $7.7 billion?

In a bidding war that’s beginning to resemble the great Jos. A. Bank-Men’s Wearhouse saga of 2013, Pilgrim’s Pride has taken Tyson Foods’ $6.8 billion offer for Hillshire Brands — a bid that bested Pilgrim’s original $6.4 billion offer for the Jimmy Dean maker — and raised it by nearly $1 billion. Acquisition darling Hillshire, meanwhile, maintains that it cannot break its merger with Pinnacle Foods but says that it is open to discussions with Pilgrim’s and Tyson.

Pilgrim’s Pride confirmed Tuesday morning that it is now offering $55 per share to acquire Hillshire, a $7.7 billion all-cash transaction that marks a $1.3 billion, or $10 per share increase over Pilgrim’s original offer for the company behind Jimmy Dean and Sara Lee. Pilgrim’s latest offer also marks a 49% premium over Hillshire’s closing price on the day prior to its announcement that it would merge with Pinnacle Foods, the producer of household names like Aunt Jemima, Mrs. Butterworth and Duncan Hines.

[Isgrimnur]

Tyson takes the title:

Tyson Foods Inc won the bidding war for Hillshire Brands Co with an all-cash offer that values the maker of Jimmy Dean sausages at $8.55 billion including debt and would be the biggest deal yet in the global meat business.

Tyson, the largest U.S. meat processor, on Monday announced an agreement to buy Hillshire for $63 per share. That was significantly higher than last week's $55 per-share bid from Pilgrim's Pride Corp, which is majority owned by meatpacking giant JBS SA of Brazil.

The high-stakes battle for Hillshire, which also sells Ball Park hot dogs, Jimmy Dean frozen breakfast sandwiches and Aidells artisan sausages, underscores how urgently large meat companies are seeking popular consumer brands to fatten profits.

"We want to buy this business for what it can become, not just for what it is now. Great brands like Hillshire, Jimmy Dean and Ball Park just don't come available very often," Tyson Chief Executive Donnie Smith said on a conference call with reporters.
...
Investors cheered the deal, sending shares in Hillshire up 4.9 percent to $61.82.

Analysts had warned that a bidding war could result in the winner overpaying for Hillshire. They also said such a merger could give the winner a competitive leg-up that would be hard for the loser to replicate.

To that end, shares in Tyson and Pilgrim's were down 4.9 percent and 4.6 percent, respectively.
...
Tyson's offer, which expires Dec. 12, is contingent on Hillshire abandoning its plan to buy Birds Eye frozen vegetable seller Pinnacle Foods Inc. Several analysts and investors view a Pinnacle deal, with a total value of $6.6 billion, as inferior.

Hillshire on Monday said it had not approved the Tyson offer and had not changed its recommendation that shareholders vote for the Pinnacle deal.

[Isgrimnur]

CNBC

Four current and former chicken industry executives, including Pilgrim’s Pride CEO Jayson Penn, have been indicted for price fixing.

Shares of Pilgrim’s Pride plunged as much as 13% in afternoon trading. The stock, which has a market value of $4.46 billion, has fallen 44% so far in 2020. Shares of Tyson Foods, which was not named in the indictment, also fell on the news.

The other executives allegedly involved in the scheme include former Pilgrim’s Pride vice president Roger Austin, Claxton Poultry Farms President Mikell Fries and Scott Brady, a former Pilgrim’s Pride executive who joined Claxton in 2012. Pilgrim’s Pride supplies chicken for Costco and Yum Brands’ KFC, while Claxton is a supplier for Chick-fil-A.

A grand jury in the U.S. District Court in Denver, Colorado indicted all four with one count of conspiring to fix prices for broiler chickens from at least 2012 through 2017.

The indictment, unsealed on Tuesday, says that the Pilgrim’s Pride and Claxton executives communicated to each other non-public information about negotiations with fast-food chains and grocery stores and put forth similar bids.

[Hrothgar]

This clearly needed its own thread. May I suggest some titles:

Poultry Price Profiteering
Chicken Cheating
Fowl Play
Broiler Bandits Busted
Coop Co-conspirators Caged

[coopasonic]

Coop Co-conspirators Caged

Hey, I wasn't involved (other than eating fast food chicken on occasion)!

[LawBeefaroni]

Chicken Choking Cost Cheats

[Daehawk]

Wouldn't surprise me if all companies didn't price fix. Its just some get caught.