Cargill, Continental Grain Company and Sanderson Farms announced that they have entered into a definitive agreement for a joint venture between Cargill and Continental Grain to acquire Sanderson Farms for 203 per share in cash.
This represents a total equity value for Sanderson Farms of $ 4.53 billion.
In turn, the purchase price represents a 30.3% premium to Sanderson Farms’ unaffected stock price of $ 155.74 on June 18, 2021, the last full trading day before media speculation about the possible sale of Sanderson Farms.
Upon completion of the transaction, Cargill and Continental Grain will combine Sanderson Farms with Wayne Farms, a subsidiary of Continental Grain, to form a new private poultry business.
The combination of Sanderson Farms and Wayne Farms will create America’s best poultry business with a high-quality asset base, complementary operating cultures, and an industry-leading management team and workforce.
Cargill and banks
For their part, Bank of America, N.A., BofA Securities, Inc. and Coöperatieve Rabobank U.A. (together with some of its affiliates, the “Lenders”), have agreed to provide the Parent Company with debt financing in a total principal amount that is sufficient, when taken in conjunction with the Parent Company’s equity financing, to pay the cash consideration required to complete the Merger.
Cargill is an American privately owned global food corporation headquartered in Minnetonka, Minnesota.
Some of Cargill’s main businesses are involved in the trade, purchase and distribution of grains and other agricultural products, such as palm oil; energy, steel and transportation trade; livestock raising and feed production; and the production of food ingredients such as starch and glucose syrup, vegetable oils and fats for application in processed foods and industrial use.
Also the company has a large financial services arm, which manages financial risks in commodity markets for the company.
The new company will have state-of-the-art operations and will continue to invest in its workforce and employee safety.
Operations will include poultry processing plants and prepared food plants in Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina and Texas.