Tyson Foods Has Had Discussions to Buy Foster Farms


 
 
11:16 02/10/2019

The parent company of Jimmy Dean, Tyson Foods, has reportedly been in discussions with Foster Farms to acquire the company for $2 billion. Two sources familiar with the situation spoke to CNBC and said that both companies could not agree on the price and that the discussions may just fall apart. If a deal is reached it could take weeks to happen. Tyson said it does not comment on rumors or speculation while a spokesperson for Foster Farms did not comment. Not too long ago Tyson closed on its acquisition of Keystone Foods for $2.16 billion. In the company's last earnings call, newly appointed CEO Noel White remarked on Tyson's global M&A strategy and said, "We're forecasting about 90% of the growth in global protein demand will take place outside the United States. We do plan to participate in that demand growth.... My priority is no different than .. .my predecessors [which have been] ... to grow our business in prepared foods, value-added products and in the international market, simultaneously working to provide stability with more of the commodity portions of our business." The company also recently announced the pending acquisition of the Thai and European operations of Brazil Foods for $340 million. The deal is expected to close by the third quarter. CEO Noel White said, "The acquisition of these BRF facilities will help complement and strengthen our presence in Thailand, and provide new capabilities in Europe, enhancing our ability to serve growing global demand for value-added protein." “It’s estimated that approximately 90 percent of global protein consumption growth will occur outside the United States, with 60 percent of the volume growth coming from Asia over the next 5 years,” says Donnie King, group president of International for Tyson Foods. “Increasing our international footprint with in-country operations and export capabilities will help Tyson Foods strategically access new markets and better serve the growing global demand for our value-added protein.” The company also reported first quarter financial results recently revealing a profit of $551 million, or $1.50 a share. Earnings, adjusted for non-recurring costs and restructuring costs, came to $1.58 per share.


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