Pilgrim’s Pride-Gold Kist Merger Creates $7 Billion Company

Source: FoodProcessing.com

Jan 03, 2007

Atlanta-based Gold Kist Inc. has agreed to a $1.1 billion takeover by Pilgrim's Pride Corp., Pittsburg, Texas. The combination will create the world's largest chicken company in terms of production, displacing Tyson Foods, and the third-largest U.S. animal protein company by revenue, the companies said.

Gold Kist's directors rebuked an earlier Pilgrim's Pride offer, calling it hostile. But in early December they agreed to a buyout of $21 a share, $1 a share more than the earlier bid, making the deal worth $1.1 billion, plus the assumption of approximately $144 million of Gold Kist debt.

Pilgrim's Pride, which closed its fiscal 2006 on Sept. 30, 2006, had annual sales of $5.2 billion, a 7.6-percent drop from FY2005, and a net loss of $34 million (versus a 2005 profit of $265 million). Gold Kist, with an identical fiscal year, had nearly identical fortunes: a 7.7 percent drop in sales (to $2.1 billion) and a $17.7 million net loss (versus $112 million profit in 2005).

Pilgrim's Pride earlier said it would not close facilities nor lay off workers after a merger. Pilgrim's Pride has said the combined operation will save $50 million a year, mostly from combining production, distribution and purchasing.

Gold Kist in November dedicated a $70 million expansion of its Live Oak, Fla., poultry processing facility and in September a $30 million expansion in Guntersville, Ala.

Show Comments
Hide Comments

Join the discussion

We welcome your thoughtful comments.
All comments will display your user name.

Want to participate in the discussion?

Register for free

Log in for complete access.


No one has commented on this page yet.

RSS feed for comments on this page | RSS feed for all comments