Firms’ merger creates a poultry powerhouse
Pilgrim's Pride Corp and Gold Kist Inc have entered into a definitive merger agreement under which Pilgrim's Pride will acquire all of the outstanding shares of Gold Kist common stock for $21 per share in cash. The transaction, unanimously approved by the boards of directors of both companies, has a total equity value of approximately $1.1 billion, plus the assumption of some $144 million of Gold Kist's debt.
Together, Pilgrim's Pride and Gold Kist will create the world's leading chicken company in terms of production and the third-largest United States meat protein company by revenues.
Pilgrim's Pride expects to achieve about $50 million of annual synergies, primarily from the optimization of production and distribution facilities and cost savings in purchasing, production, and logistics.
The Pilgrim's Pride offer represents roughly a 62% premium over Gold Kist's closing stock price Aug 18, 2006, the last day of trading before Pilgrim's Pride notified Gold Kist's board of directors in a public letter that it was offering to purchase the company.
