Privately-held Cargill, Continental Grain Co. and Sanderson Farms, Inc. (SAFM) announced Monday they have reached a definitive agreement for a joint venture between Cargill and Continental Grain to acquire Sanderson Farms for $203 per share in cash, representing a total equity value for Sanderson Farms of $4.53 billion.
The purchase price represents a 30.3% premium to Sanderson Farms’ unaffected share price of $155.74 on June 18, 2021, the last full trading day prior to media speculation about the potential sale of Sanderson Farm
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, privately held poultry business. Wayne Farms CEO Clint Rivers will lead the combined business.
The combination of Sanderson Farms and Wayne Farms will create a best-in-class U.S. poultry company with a high-quality asset base, complementary operating cultures, and an industry-leading management team and workforce.
Cargill expects to support the new joint venture with its longstanding relationships with retail and foodservice customers.
The transaction is expected to close by the end of 2021 or early 2022, and will be subject to regulatory and Sanderson Farms stockholder approval, and other customary closing conditions. The acquisition consortium has committed equity and debt financing in place to complete the transaction.
Upon the completion of the transaction, Sanderson Farms will become a private company, and its shares will no longer be traded on NASDAQ.
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