LAUREL, MISS. – A joint venture between Continental Grain Co., New York, and Cargill, Minneapolis, has an agreement in place to acquire poultry processor Sanderson Farms, Inc. for $4.5 billion. The plan is to merge Sanderson Farms with Wayne Farms, a subsidiary of Continental Grain.
The transaction is expected to close by the end of 2021 or in early 2022, and Clint Rivers, the chief executive officer of Wayne Farms, will lead the combined companies.
“We are very happy to partner with Cargill with whom we have had a decades-long relationship between two family-owned companies,” said Paul Fribourg, chairman and CEO of Continental Grain. “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.”
Sanderson Farms had sales of $3.56 billion in fiscal 2020. The company has 13 processing plants, the capacity to process 1.3 million birds per week and employs approximately 17,000.
“This transaction is the culmination of that commitment, as it delivers a significant value to our stockholders, reflecting the dedication of our team, and our best-in-class assets, quality products, efficient and sustainable operations, and respected brand,” said Joe Sanderson, chairman and CEO of Sanderson Farms, Inc. “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.”
Based in Oakwood, Ga., Wayne Farms had sales of $2.2 billion in 2020, has 11 plants and employs approximately 9,000.
Cargill said it will support the new joint venture with its relationships with retail and food service customers.
“Expanding our poultry offerings to the US is a key enabler of our ability to meet customer and consumer demands,” said David MacLennan, chairman and CEO of Cargill. “With these great businesses and our strong partnership, we believe we will deliver a superior portfolio of products and services to our customers.”
The acquisition will be a cash transaction in which shareholders of Sanderson Farms will receive $203 per share. The purchase price represents a 30.3% premium to Sanderson Farms’ unaffected share price of $155.74 on June 18, the last full trading day prior to media speculation about the potential sale of Sanderson Farms, according to Continental Grain.