Tyson Foods has agreed to buy Ohio-based sandwich producer AdvancePierre Foods for about $3.2bn.
The acquisition will expand Tyson Foods' portfolio of prepared foods and protein-packed brands.
A subsidiary of Tyson Foods will offer to buy all of the shares of AdvancePierre with each priced at $40.25.
The merger transaction will also include Tyson Foods assuming AdvancePierre debt of $1.1bn which takes the total transaction value to around $4.2bn.
Tyson president and CEO Tom Hayes said: “The AdvancePierre leadership team has created significant value through the implementation of a new business management model, focus on quality and service and attention to the growth opportunities in convenience foods.
“The addition of AdvancePierre aligns with our strategic intent to sustainably feed the world with the fastest growing portfolio of protein packed brands.
“This transaction will provide an attractive current premium to AdvancePierre shareholders as well as significant ongoing benefits to Tyson shareholders and the customers and team members of both companies.”
Headquartered in Blue Ash, AdvancePierre Foods produces ready-to-eat lunch and dinner sandwiches, sandwich components and snacks. Its product categories are said to be complementary with the Arkansas-based Tyson Foods.
AdvancePierre president and CEO Christopher Sliva said: “By combining our complementary, market-leading portfolios, both companies will realize greater opportunities.
“This combination will allow AdvancePierre to accelerate its growth and broaden its distribution network by leveraging Tyson’s existing distribution infrastructure and go-to-market capabilities.
“Importantly, the transaction also offers compelling and certain value for our shareholders and will provide long-term benefits for our team members and customers.”
The acquisition will also bring the Barber Foods, a chicken products brand into the fold of Tyson Foods. Based in Portland, Maine, Barber Foods was acquired by AdvancePierre Foods in 2011.
Apart from that, Tyson expects cost synergies of around $200m to be created from the merger which are likely to be realized inside three years.
Tyson Foods’ deal has received support through a tender and support agreement from Oaktree Capital Management which holds nearly 42% stake in AdvancePierre.
The transaction has received approval from the two boards of directors. Subject to customary conditions and approvals, the merger deal is expected to be completed in Tyson’s third quarter this year.
