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Tyson Foods Wins High-Priced Bid For Hillshire Brands

Drought and disease have driven up the prices of beef, pork and chicken, scoring big profits for meat processing companies.

Bag of Tyson's frozen chicken nuggets

Photo: Quinn Dombrowski (Flickr)

Analysts fear that the Tyson-Hillshire-Pinnacle merger will monopolize meat production and stifle market competition.

Tyson Foods acquired Hillshire Brands on Monday, after a high-priced bidding war that caused analysts to raise their eyebrows over the deal’s value and future effects.

On May 12, Hillshire Brands acquired Pinnacle Foods, distributor of foods like Bird’s Eye frozen vegetables and Vlasic pickles, for $6.6 billion dollars. As part of the deal, Hillshire also assumed Pinnacle’s debt—about five times its earnings before interest, taxes, depreciation and amortization (EBITDA).

Meat packaging companies are fighting to amass profitable brands amid higher prices for pork, chicken and beef in the United States.

Tyson won Hillshire after beating out chicken producer Pilgrim’s Pride by $8 per share—$63 dollars to Pilgrim’s Pride’s $55.

Analysts are concerned that, amidst the bidding war, Tyson greatly overpaid for Hillshire. Another cause for concern is that the merger will monopolize meat production and stifle market competition.

Read More:

  • Tyson wins bid for Hillshire in battle of meat titans (Chicago Tribune)
  • Tyson Foods Wins The Bidding War For Hillshire Brands At A Steep Price (Forbes)
Liz Leslie

Liz Leslie is a journalist based in Chicago. When she's not writing about food, she's likely eating food. Or dreaming about food.

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