Tyson Foods Inc. and Pilgrim's Pride are engaged in a multi-billion dollar bidding war for Chicago-based sausage company Hillshire Brands, according to media reports.
Brazilian meat company JBS SA, which owns about 75 percent of Pilgrim's Pride, announced May 27 its unsolicited $5.6 billion offer for Hillshire. The deal is contingent upon Hillshire cancelling its $4.8 billion agreement to acquire Pinnacle Foods Inc., Bloomberg Businessweek reported.
Tyson upped the ante days later by offering $6.3 billion for Hillshire in a move to expand its supermarket food offerings, according to Reuters. Tyson's deal also requires Hillshire to cancel the acquisition of Pinnacle.
Hillshire said in a statement that it would thoroughly review both offers.
"We thought this might happen given the heated land grab underway in the food sector over the past year as companies large and small scramble after choice assets to grow market share, optimize and expand product lines, and whittle costs to boost profits," Vicki Bryan, senior high yield analyst, at corporate bond research service Gimme Credit, told Reuters.
