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Home / Business / Tyson Foods has lectured on buying Foster Farms for $ 2 billion

Tyson Foods has lectured on buying Foster Farms for $ 2 billion



Meat processor Tyson Foods has held talks about buying privately owned California-based Foster Farms for about $ 2 billion, people familiar with the situation, CNBC says.

9659004] The deal comes just months after Tyson closed his 2.16 billion US acquisition of McDonald's meat supplier Keystone Foods, which further expanded its capacity in Asia.

An American brand such as Foster Farms, which makes branded chicken, turkey products. and frozen food, will therefore mark a mild change in course for Tyson, instead echoing a strategy it pursued in 2014, with its 7.7 billion US acquisition of Hillshire Brands bringing it Jimmy Dean sausages and Ball Park sausages.

Tyson's executives were asked about their global M&A strategy during the company's November revenue call. Of particular concern to an analyst was international expansion in the context of geopolitical uncertainty and currency fluctuations.

In response, CEO Noel White, " We predict about 90% of the growth in global protein demand will take place outside the United States. We are planning to participate in that demand growth …. My priority is no different than …. my predecessors [which have been] … expanding our business into prepared foods, value-added products and in the international market, is also working to provide stability with more of the goods of our business. "

White took over as CEO on September 30, 2018 after serving as Tyson's chief executive officer for steak, pork and international.

Foster Farms was founded in 1939 by Max and Verda Foster. It owns farms in California and Louisiana, and also works with 30 family-owned farms in Washington and Oregon. In 2016, Laura Flanagan named her CEO, taking over Ron Foster, the grandson of the company's founder.

Tyson, founded in 1935 by John W. Tyson, generated about $ 40 billion in sales last year. Shares in the company, which have a market value of $ 18 billion, are down 15 percent over the past year.

People asked for anonymity because the conversations are confidential. Tyson said it didn't comment on rumors or speculation. A spokesman for Foster Farms did not respond to requests for comment.

-CNBCs

David Faber

contributed reporting


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