Merger Complete, Tyson Foods Moving Forward

Tyson Foods president and CEO Donnie Smith said Thursday the combination process of Tyson and The Hillshire Brands Co. is well under way.

Smith spoke to investors Thursday in Boston at the Barclays Back-to-School Consumer Conference, one week after Tyson completed its successful acquisition of Hillshire Brands for $8.5 billion, making it the largest merger in the history of the U.S. meat industry.

“We’re moving forward quickly with the integration and finding synergies, and we feel good about our ability to capture $225 million in synergies in the first year and $500 million by year three,” Smith said in a Tyson news release. “The more we get into it, the better we feel.”

Smith, according to the release, told investors at the annual Barclays Back-to-School Consumer Conference that as the companies come together, it will be important to keep the best aspects of both organizations intact.

He especially wants to keep the spark that led to the brand-building, marketing, innovation and product-development success at Hillshire. He said the Hillshire merger moves Tyson forward faster.

“We’re staying focused on our strategy,” said Tyson executive vice president and CFO Dennis Leatherby in summarizing Thursday’s presentation. “We’re going to leverage our iconic brands and No. 1 market share positions to grow the prepared foods segment, and we’ve hit the ground running to capture synergies. If we do all these things well, the result will be reduced volatility and expanded operating margins.”

In the release, Tyson reiterated its fiscal 2014 earnings guidance of at least $2.78 per share, excluding costs or earnings associated with the Hillshire merger.

Leatherby said the company expects the addition of Hillshire to be accretive to earnings in fiscal 2015 and substantially accretive thereafter. Leatherby said he expects at least 10 percent earnings per share growth in fiscal 2015.

Tyson’s fiscal 2014 year ends September 27.