Tyson and IBP agree on $2.7bn acquisition

On June 27, the American poultry giant Tyson Foods Inc. claimed it agreed to acquire beef and pork producer IBP Inc. and form the largest US meat company for about $2.7bn in cash and stock, nearly 16 per cent less than its previous bid. Recently, a Delaware judge forced the Tyson to renegotiate the deal it abandoned in March. The revised agreement calls for a two-step transaction that uses the same financial terms laid out in Tyson's original January merger agreement, the companies said in a statement. Slightly more than half of the IBP shares will be bought at $30 each through a cash tender offer that is expected to begin no later than July 5, and the remainder will be exchanged at 2.381 Tyson shares for each IBP share. The tender offer must be completed by September 1. According to Christine McCracken, a food analyst with Midwest Research, the deal makes sense for Tyson, because IBP is in the initial stages of developing branded, pre-packaged meats for grocers, much the same way that Tyson developed a similar market in the poultry industry. The transaction will result in a combined company with approximately 28 per cent of the beef market, 25 per cent of the chicken market and 18 per cent of the pork market in the United States. Source: Reuters​