Meat&Poultry -- September 2014 - 10

Business Notes

Tyson to divest Heinhold, Connolly to step down
Tyson Foods Inc., Springdale, Ark., has completed its

DOJ upon a proposed settlement, which has been filed

merger with The Hillshire Brands Company. But the pre-

today [Aug. 27] in the US District Court for the District

pared-foods juggernaut will be moving forward without

of Columbia," Tyson said in a statement. "The settle-

Sean Connolly, former president and CEO of Hillshire.

ment is subject to approval by the court under the tradi-

Connolly "has chosen to pursue other interests, but
will consult during the integration process," Tyson said

tional procedures set forth in the Antitrust Procedures
and Penalties Act."

in a statement. Prior to his 2012 appointment as CEO of

The US Dept. of Justice's Antitrust Division pressed for

what was then Sara Lee's North

additional information from Tyson about the acquisition.

American meat business, Con-

Tyson said the request related "only to a very small por-

nolly spent a decade at Campbell

tion of the combined Tyson/Hillshire Brands business ..."

Soup Co., as president of Camp-

As a result of the request, Tyson extended its offer to

bell North America. He helped lead

purchase all of the outstanding shares of Hillshire Brands.

the development of new products,

The offer expired at the end Aug. 27. Tyson agreed to

including the V8 V-Fusion line of

buy all outstanding shares of common stock of Hillshire

juice drinks. Ten years before join-

Brands for $63.00 per share in cash.

Sean Connolly

ing Campbell, Connolly managed

The proposed settlement centers on Tyson Foods' pork

brands and marketing for Proctor

assets. The company must divest itself of its Heinhold

& Gamble. His reputation for successfully leading the in-

Hog Markets business within 90 days of Aug. 27. Both

novation of established brands is well documented and his

Heinold Hog Markets and Hillshire Brands buy sows

success in elevating Hillshire is the latest feather in his cap.

from US farmers. Heinold Hog Markets buys sows from

The merger of Tyson Foods and Hillshire Brands cre-

farmers, sorts the sows at buying stations and resells and

ates a single company with more than $40 billion in an-

trucks the sows to sausage processors. Hillshire buys sows

nual sales and a portfolio of popular brands such as Tyson,

directly from farmers, which it then makes into sausage

Wright, Jimmy Dean, Ball Park, State Fair and Hillshire

sold under the Jimmy Dean and Hillshire Farm brands.

Farm. The merger also is expected to generate savings of

The acquisition of Hillshire by Tyson Foods would

$225 million in fiscal 2015 and more than $500 million

combine two major purchasers of sows from farmers in

by fiscal 2017. Shares of Hillshire Brands common stock

the United States and eliminate the benefit farmers have

were delisted and ceased trading on the New York Stock

received from the competition between Hillshire and Ty-

Exchange and Chicago Stock Exchange before the open-

son's Heinold Hog Markets, according to the DOJ.

ing on Aug. 29.

"Farmers are entitled to competitive markets for their

"Part of our strategic growth has been to shift toward

products," said Bill Baer, assistant attorney general in

higher-margin prepared and branded foods. This transac-

charge of the antitrust division. "Today's proposed set-

tion gives us a portfolio of complementary, proven brands

tlement will help ensure that hog breeders in the United

as a new springboard," said Donnie Smith, Tyson CEO.

States will continue to receive the benefits of vigorous com-

In other news, the two companies reached a settlement

petition when selling sows. Without the divestiture, the

with the US Dept. of Justice in connection with the pro-

proposed acquisition would have eliminated a significant

posed acquisition.

customer for farmers' sows and likely would have resulted

"Tyson and Hillshire Brands have agreed with the

10

* Meat&Poultry * September 2014 * www.MeatPoultry.com

in less competition in this important agricultural market."
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