SPRINGDALE, Ark. & CINCINNATI, Ohio – Tyson Foods Inc. and AdvancePierre Foods Holdings Inc. announced a definitive merger agreement that combines two highly complementary portfolios. The total enterprise value of the transaction is approximately $4.2 billion, including $3.2 billion in equity value and $1.1 billion in assumption of AdvancePierre debt.
Tyson President and CEO Tom Hayes said, “We are very pleased to announce this combination with AdvancePierre. 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. We believe that AdvancePierre and Tyson are a natural strategic fit and together will accelerate growth for customers by delivering on-trend, high quality products consumers love.”
AdvancePierre President and CEO Christopher D. Sliva said, “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.”
AdvancePierre’s product portfolio fits well with Tyson’s strategy to expand its fresh prepared foods offering for both out-of-home and in-home eating occasions. The collective portfolio of sandwiches, sandwich components, entrees and snacks will extend Tyson’s core strength into the fast-growing convenience and retail perimeter with solutions that span all day parts.
Tyson expects the transaction will result in cost synergies of approximately $200 million, to be fully realized within three years. Cost synergies will be created by a consolidated manufacturing footprint, procurement efficiencies, distribution network consolidation, and addressing redundant sales and marketing functions and duplicative corporate overhead.
Tyson also sees the opportunity to utilize high-quality raw materials from the fresh meats division to drive growth and efficiency. The transaction is expected to generate revenue synergies over time by utilizing Tyson’s product innovation platform and portfolio of brands to drive growth across AdvancePierre’s sandwich, entrée and snack categories.