SPRINGDALE, Ark. — Tyson Foods’ purchase of Hillshire Brands has been completed, both companies announced late last month. Earlier this year, Tyson agreed to pay about $8.55 billion for the Chicago-based company.
"As of today, Tyson Foods and Hillshire Brands are officially together in one great company," Tyson CEO Donald J. Smith said Aug. 28 in a statement. "Part of our strategic growth plan has been to shift toward higher-margin prepared and branded foods. This transaction gives us a portfolio of complementary, proven brands as a new springboard and accomplishes in a short time what would have taken us years to build on our own."
The new leadership team for the combined company will include senior officials from Tyson and Hillshire, Smith said. Hillshire’s shares are no longer traded on the New York Stock Exchange and the Chicago Stock Exchange.
Hillshire’s products include Hillshire Farm, Jimmy Dean and Ball Park brands. Hillshire had about $4 billion in sales in fiscal 2013 and has more than 9,000 employees, the company has said. Tyson had sales of $35.4 billion last year, according to the company. In addition to Tyson products, other brands include Corn King, Lady Aster and Star Ranch Angus beef.
The acquisition of Hillshire would fit in with Tyson’s long-term strategies, Smith said earlier this year.
"Our strategy is to accelerate our growth in prepared foods, in value-added poultry and in international," he said. "And we’re going to focus our mergers and acquisitions activity along those three portfolios of business. And that’s our focus. So you should expect our mergers and acquisitions and our organic growth to all be concentrated around those areas."
The Tyson-Hillshire announcement came one day after the U.S. Department of Justice (DOJ) and state attorneys general in Illinois, Iowa and Missouri filed a civil lawsuit with the U.S. District Court for the District of Columbia in an attempt to block the sale. The same day, the DOJ filed a proposed settlement with the court that would require Tyson to rid itself of its sow purchasing business, Heinhold Hog Markets, in order for the department to approve the merger.
The court will issue its decision after a 60-day comment period has passed.
Without the sale of Heinhold, the merger of Tyson and Hillshire would have combined companies that account for more than a third of sow purchases from U.S. farmers, the DOJ said.
"Farmers are entitled to competitive markets for their products, (and) today’s proposed settlement will help ensure that hog breeders in the United States will continue to receive the benefits of vigorous competition when selling sows," Bill Baer, assistant attorney general in charge of the Antitrust Division, said in a statement. "Without the divestiture, the proposed acquisition would have eliminated a significant customer for farmers’ sows and likely would have resulted in less competition in this important agricultural market."
Tyson must divest itself of Heinhold in its entirety to a buyer approved by the Antitrust Division, according to the DOJ. Tyson and Hillshire officials are in agreement regarding the proposed settlement with the DOJ, the companies said.
The Tyson-Hillshire purchase announcement followed dueling unsolicited offers for Hillshire beginning in late May from Tyson and Pilgrim’s Pride, a subsidiary of JBS. Pilgrim’s Pride made its initial offer May 27 and Tyson followed with its first proposal two days later. On May 12, before either company made its initial offer, Hillshire had agreed to a merger deal with Pinnacle Foods. That agreement was terminated in late June, allowing Tyson’s deal to purchase Hillshire to move forward.
