Tyson?s Big Purchase the Exception in 2001

Tyson Foods Inc.’s September acquisition of IBP Inc. was one of the few major mergers in the food industry during an economically strapped 2001.

Food Institute of Elmwood Park, N.J., released its study April 17 for the previous year’s meatiest deals. It tracked 516 mergers and acquisitions in 2001, 125 fewer (or 20 percent less) than were documented in 2000 and the lowest level tracked since 1993. Among the segments with the sharpest declines: restaurant and food service (down 30 to 61); packaging and equipment suppliers (down 24 to 28); and food processing firms (down 26 to 146).

Tyson, the world’s largest poultry producer, finally acquired IBP, a beef and pork processing giant, after about nine months of negotiations and legal battles. Tyson had won the bid over rival Smithfield Foods of Virginia. But Smithfield kept busy after losing in its attempt to get IBP, grabbing an impressive number of companies, including Pinnacle Foods, Moyer Packing Co., The Smithfield Cos. and others.

“After two years of decline, merger and acquisition activity was on the rise, totaling 27 transactions, three more than in 2000, although the scope of the deals was for the most part smaller than in previous years,” said Catherine Pfister, a market analyst for the Food Institute.