The all-cash deal will add a broad line of sandwiches, including peanut butter and jelly and Philly cheesesteak, to Tyson Foods’ protein-packed product portfolio, which the business is growing rapidly.
Tyson will launch a tender offer to acquire all the outstanding shares in AdvancePierre Foods, valued at $40.25 per share. The $4.2bn deal includes $3.2bn in equity value and an assumed $1.1bn in AdvancePierre Foods' debt.
Tyson said the price it has offered AdvancePierre Foods is more than 10% higher than the closing price of the business on 5 April 2017 – the most recent unaffected trading day.
It is unclear if any jobs will be affected by the deal.
Tyson Foods president and CEO Tom Hayes said he was pleased to announce the deal.
“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.
“We are always prudently evaluating opportunities to leverage our strengths to drive future growth, whether by divesting non-core, non-protein focused assets or by acquiring companies like AdvancePierre that enhance our capabilities in growing categories.
“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. We look forward to welcoming AdvancePierre’s dedicated team members to the Tyson family.”
AdvancePierre president and CEO Christopher Sliva said the deal with Tyson Foods would help the business “accelerate its growth and broaden its distribution network by leveraging Tyson’s existing distribution infrastructure and go-to-market capabilities”.
He added: “Importantly, the transaction also offers compelling and certain value for our shareholders and will provide long-term benefits for our team members and customers.”