Cargill and Continental Grain Company have announced plans to acquire Sanderson Farms, the third-largest poultry producer in the nation, for $4.53 billion.
According to a release, the two companies plan to combine Sanderson Farms with Wayne Farms, the seventh-largest vertically integrated poultry producer in the U.S. and a subsidiary of Continental Grain, to form a new poultry business.
“We are proud to be joining with Cargill and Continental Grain and we are confident that they will be strong stewards of the Sanderson Farms team, brand and assets going forward,” Joe Sanderson, the chairman and CEO of Sanderson Farms, said in the release.
The new business created by combining Sanderson Farms and Wayne Farms will be a privately held company led by Clint Rivers, the current CEO of Wayne Farms. It will have poultry processing and prepared food plants in seven states: Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina and Texas.
“Expanding our poultry offerings to the U.S. is a key enabler of our ability to meet customer and consumer demands," Cargill Chairman and CEO David MacLennan said in the release. "With these great businesses, and our strong partnership, we believe we will deliver a superior portfolio of products and services to our customers.”
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The companies expect the deal to close by the end of 2021 or in early 2022. Sanderson Farms shareholders will need to approve the transaction, which is also subject to regulatory approvals.
“Wayne Farms has been one of the most important and successful parts of Continental Grain for almost 60 years, so bringing together two great partners with two great poultry companies will ensure good things for our customers, our grower partners, and our employees,” Paul Fribourg, chairman and CEO of Continental Grain, said in the release.
The transaction is expected to close by the end of 2021, though it may also close by early 2022. According to the release, it will be “subject to regulatory and Sanderson Farms stockholder approval, and other customary closing conditions.”
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