Tyson Reaches Agreement With IBP
by January 2, 2001 12:46 pm 98 views
Shares of IBP Inc. of Dakota Dunes, S.D., the beef and pork company that reached a merger agreement Monday with Tyson Foods Inc. of Springdale, rose during trading Tuesday morning, up $1.69 from its previous close of $26.75 on Dec. 29.
IBP (NYSE:IBP) was trading at $28.44 Tuesday, outperforming its 52-week high of $26.93.
In the meantime, shares of Tyson (NYSE:TSN) had fallen $0.56 from $12.75 at the close of the market Dec. 29 to $12.19 Tuesday morning. Tyson’s 52-week high was $17.75.
Chicken giant Tyson Foods is likely to become the beef and pork king, too. The company announced on New Year’s Day that it had won a bitter battle with Smithfield Foods of Smithfield, Va., reaching “a definitive merger agreement” with IBP.
The $4.7 billion agreement calls for Tyson to pay $3.2 billion in cash and stock for IBP while assuming $1.5 billion of debt. Tyson agreed to pay $30 per share in cash and stock.
Smithfield, a leader in the pork market, offered $32 per share, but its deadline expired without a response from IBP.
“We are extremely pleased that IBP has accepted our proposal, which we believe creates tremendous value for the shareholders, team members and customers of both companies,” said John Tyson, chairman, president and CEO of Tyson Foods.
“By combining the No. 1 poultry company with the leader in beef and pork, we are creating a unique company that has a major global presence.”