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Who bought Sanderson Farms?

With the price of chicken soaring, the third-largest poultry producer in the U.S. is being bought for $4.53 billion. Cargill and Continental Grain have formed a joint venture to acquire Sanderson Farms, paying $203 per share in cash for a company that last year processed more than 4.8 billion pounds of meat. ABC NewsWith chicken prices soaring, Sanderson Farms sold for $4.5B

With chicken prices soaring, Sanderson Farms sold for $4.5B

WJTV 12 News 11 August, 2021 - 01:40am

The companies plan to combine Sanderson Farms with Wayne Farms, a Continental Grain subsidiary, to form a new, privately held poultry business. Operations will include poultry processing plants and prepared foods plants across Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina, and Texas.

Sales at Sanderson Farms soared more than 34% during the second quarter compared with the same three-month period last year.

“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 a prepared statement Monday.

Sanderson Farms, based in Laurel, Mississippi, will become a private company and its shares will no longer be traded on Nasdaq. Shares jumped about 8% before the opening bell.

The deal is expected to close by the end of this year or early next year. It still needs approval from Sanderson Farms stockholders.

Cargill and Continental Grain to buy chicken producer Sanderson Farms for $4.5 billion

The Poultry Site 11 August, 2021 - 01:40am

Wayne Farms Chief Executive Officer Clint Rivers will lead the combined business, which will be privately held upon the deal's closure expected to be by early 2022.

Cargill and Continental Grain will pay Sanderson Farms shareholders $203 apiece, representing a premium of about 11% to the stock's closing price on Friday 6 August.

The offer price also represents a 30.3% premium to the stock's closing price on 18 June, before reports emerged about Sanderson Farms exploring a sale.

Shares of Sanderson Farms rose 8% to $196.65 in premarket trading on 9 August.

Prices of chicken products, especially those of wings and breasts, have risen as easing pandemic-related restrictions bring consumers back to restaurants and more fast-food chains add new menu items to lure customers.

Sanderson Farms, which sells frozen chicken to several US retailers and restaurants, processed over 4.8 billion pounds of meat in fiscal 2020.

Last year, Sanderson Farms rejected an unsolicited takeover offer of $142 per share from investment firm Durational Capital Management.

JP Morgan analysts said in June a deal between Continental Grain and Sanderson Farms would draw government attention, as a combined entity would control about 15% of the US chicken market and given recent lawsuits regarding chicken price fixing.

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Cargill's Sanderson Farms buyout likely to leave Waco plants intact

Waco Tribune-Herald 11 August, 2021 - 01:40am

Cargill and Sanderson Farms poultry processing plants that together employ some 1,850 people in Waco will both likely remain open after an expected $4.53 billion buyout involving the two agribusiness giants, a Cargill official said Tuesday.

Cargill and Continental Grain Co. on Monday announced plans to acquire Sanderson Farms and combine it with Wayne Farms, a Continental subsidiary, pending regulatory approval.

The announcement drew objections from U.S. Sen. Chuck Grassley, the top Republican on the Judiciary Committee, who said the proposed new private entity would capture 15% of the U.S. chicken market and limit consumer choice and competition.

The privately held Cargill operates a plant at 2510 Lake Shore Drive that historically has processed whole turkeys but has focused since 2019 on preparing cooked deli meats. Sanderson Farms operates a chicken hatchery and a live bird processing plant off East Highway 84.

Sanderson employs 1,200 here, and Cargill employs 646, according to an online report from the Greater Waco Chamber of Commerce.

A Cargill spokesman said Tuesday that it would make economic sense for both the Cargill and Sanderson Farms plants in Waco to remain open following regulatory approval. He said market conditions in the poultry industry mean "a continued need to retain talent and capacity."

A news release announcing the deal said the new company "will have state-of-the-art operations and will continue to invest in its workforce and in employee safety. Operations will include poultry processing plants and prepared foods plants across Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina and Texas."

Wayne Farms, a subsidiary of Continental Grain, owns and operates fresh and further-processed facilities throughout the Southeast, employing more than 9,000 people. Continental Grain, referred to as Conti, owns and operates companies with more than 200 years experience in agribusiness.

Upon the deal's completion, Cargill and Continental Grain will combine Sanderson and Wayne Farms to form a new, privately held poultry business.

"For now, nothing will change," said Wayne Farms spokesman Frank Singleton. "The merger will involve the combination of two companies with an ongoing mission and customers. He said the status of the plants in Waco should become clear as the deal proceeds through the regulatory process."

As for any suggestion that Cargill or Sanderson Farms plants would close after the deal, he said, "Anything like that is conjecture."

In a statement, Paul Fribourg, chairman and CEO of Continental Grain/Wayne Farms, had praise for Cargill and Sanderson Farms.

"Sanderson Farms' operations, best-in-class assets and valuable brand have underscored their success, and we have the highest respect for Joe Sanderson, and the business and team he has built as the third generation CEO," he said.

Mike Cockrell, chief financial officer of Mississippi-based Sanderson Farms, did not return calls Monday seeking comment on the Waco plant. Sanderson Farms also operates poultry processing plants in Bryan, Palestine and Tyler and does business with chicken farmers in the region.

Sanderson Farms opened its Waco plant in 2007 with the help of city and county incentives. Cargill bought its Waco plant in the late 1990s from Plantation Foods, which was owned by the Roane Lacy family.

Yet a third poultry giant, Pilgrim's, operates a Waco cooking facility, next to the Cargill plant. Pilgrim's workers recently voted to unionize the plant.

Mike Copeland is Waco native who attended Baylor University and joined the Tribune-Herald in 1978. He's been covering local business since 1992.

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Going for more than chicken feed: Nation's third-largest poultry producer with Louisiana plant being sold - see how much

The Advocate 11 August, 2021 - 01:40am

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Cargill and privately held Continental Grain formed a joint venture to acquire Sanderson and will pay $203 per share in cash for a company that last year processed more than 4.8 billion pounds of meat.

The companies plan to combine Sanderson Farms with Wayne Farms, a Continental Grain subsidiary, to form a new, privately held poultry business. Operations will include poultry processing plants and prepared foods plants across Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina and Texas. 

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Laurel, Mississippi-based Sanderson Farms has 17,000 employees. It processes 13.6 million chickens per week. Its Louisiana plant in Hammond accounts for about 650,000 chickens per week, according to Sanderson's website.

Wayne Farms has more than 9,000 employees. It makes products under brand names including Wayne Farms fresh and prepared chicken; Platinum Harvest premium fresh chicken; Chef's Craft gourmet chicken; Naked Truth premium chicken and Ladybirdy premium chicken.

The deal comes as chicken prices are surging. Wholesale chicken breast prices have been at or above $1.80 per pound since mid-April, a seven-year high, according to the Livestock Marketing Information Center. Last year at this time, they were $1.13 per pound.

Pandemic-related plant shutdowns last year and winter storms across the South earlier this year have impacted supplies.

The price increases have been compounded by demand from major restaurant chains. McDonald’s Corp., Popeyes Louisiana Kitchen Inc., Wendy’s Co. and Burger King have all recently introduced new variations of chicken sandwiches. 

Sales at Sanderson Farms soared more than 34% during the second quarter compared with the same three-month period last year.

“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.

Cargill is one of the world's largest food companies, with more than 155,000 employees in 70 countries. It produces meat and animal feed and makes agricultural commodities like vegetable oil, among other businesses. Continental Grain invests in food companies and operates food production companies in Latin America, Asia and elsewhere.

The U.S. poultry industry has been operating under a cloud in recent years. Restaurant chains, food producers and grocers, including Walmart, Kroger and Chick-fil-A, sued Sanderson Farms, Wayne Farms and other poultry producers in 2016 alleging that the companies conspired to fix poultry prices over an eight-year period.

The U.S. Department of Justice intervened in the case and has charged at least 10 people with antitrust violations, including current and former employees at Pilgrim's Pride, Claxton Poultry Farms, Perdue Farms and Koch Foods. Sanderson Farms and Wayne Farms have not been charged. Sanderson received a subpoena in the case in 2019 and has said it is cooperating.

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