Sanderson Farms Inc. agreed to sell itself for around $4.5 billion as the poultry giant rides a wave of demand for chicken products.
Cargill Inc. and agricultural-investment firm Continental Grain Co., which owns a smaller chicken processor, said Monday they reached a deal to take Sanderson private.
The deal values Sanderson at $203 a share, about 30% above the stock price before The Wall Street Journal reported in June that the company had attracted interest from suitors including Continental. The Journal reported Sunday that the three were nearing a deal.
Mississippi-based Sanderson is the country’s third-biggest chicken producer. It runs 13 poultry plants from North Carolina to Texas, processing about 13.6 million chickens a week. The company supplies grocery chains including Walmart Inc. and Albertsons Cos. as well as restaurant distributors like Sysco Corp. and US Foods Holding Corp.
Combining Sanderson with Georgia-based Wayne Farms LLC, a poultry company owned by Continental, would form a new competitor representing about 15% of U.S. chicken production, according to data from Watt Poultry USA. Tyson Foods Inc. leads the industry with about one-fifth of the market, while Pilgrim’s Pride Corp. represents about 16% of the national total.
