Tyson Foods may be adding some additional poultry power to its playbook. According to sources in communication with CNBC, the protein processor has been in talks to purchase Foster Farms for around $2 billion. CNBC’s sources noted that pricing for the potential deal is the current point of contention between the two companies, and even if an agreement were to be reached, an acquisition would not be solidified for several weeks.
Tyson has been no stranger to major acquisitions in recent years. The company acquired McDonald's meat supplier Keystone Foods in December 2018 for $2.16 billion in a move that expanded the company’s global business. Tyson made moves to grow domestically with its 2014 acquisition of Jimmy Dean and Ball Park parent company, Hillshire Brands, for $7.7 billion.
CEO Noel White commented on Tyson’s M&A strategy during the company's November earnings call: "We're forecasting about 90 percent of the growth in global protein demand will take place outside the United States. We do plan to participate in that demand growth...My priority is no different than...my predecessors [which have been]...to grow our business in prepared foods, value-added products, and in the international market, simultaneously working to provide stability with more of the commodity portions of our business."
Foster Farms, founded in 1939 by Max and Verda Foster, operates farms in California, Louisiana, Washington, and Oregon. In 2016, the company said goodbye to its Founders’ grandson, Ron Foster, and brought on new CEO Laura Flanagan, whose background includes leadership at ConAgra and PepsiCo.
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