Hillshire Brands: A Case Study

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Tyson Foods Wins Food Frenzy for Hillshire Last May 2014, a food fight occurred between Tyson Foods and Pilgrim’s Pride over Hillshire Brands. Tyson Foods and Pilgrim’s Pride are two of the biggest meat processing companies in the United States and Hillshire Brands are the makers of the brands Jimmy Dean, Ball Park Franks, and Sara Lee. Hillshire first announced that they were going to merge with Pinnacle Foods for 4.2 billion dollars. This set off an auction between Pilgrim’s Pride and Tyson Foods for Hillshire. Both companies think that Hillshire can benefit more if they merge with either of them. Initially, Pilgrim’s Pride offered 45 dollars per share for Hillshire on May 27. The following week, Tyson Foods topped that offer with 50 dollars…show more content…
For the Hillshire auction, one company will win over the other if the company’s bid exceeded the other company’s bid by 2.50 dollars. In theory, Tyson Foods could have won if they bid at around 57.50 dollars per share if they had known that Pilgrim’s Pride did not change their 55 dollars per share offer. Some people think that Tyson Foods overpaid for Hillshire brands but the Tyson Foods executives defended the deal. They stated that the offer was made to ensure that they would win the bidding and that Hillshire was worth the price. I personally think that Tyson Foods slightly overpaid for Hillshire. Tyson Foods did not know if Pilgrim’s Pride raised their offer or not. They offered a high price to avoid losing the auction because the company really wanted Hillshire. If Tyson Foods did overspend for the acquisition of Hillshire, I think they can compensate for it in the long run. Tyson Foods is a huge meat processing company but they currently don’t have any branded line. Hillshire Brands, on the other hand, has well-known brands of sausages and other processed meat. The merger will help the companies cut expenses because the meat processed by Tyson Foods can be used for the products of the Hillshire Brands. In the long run, I think the merger is profitable for Tyson

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