SPRINGDALE, Ark. -- Tyson Foods Inc. is expanding its protein prowess with the addition of Keystone Foods. Tyson has entered a definitive agreement with Keystone's parent company, Marfrig Global Foods SA, to buy the West Chester, Pa.-based meat supplier for $2.16 billion in cash.
Keystone sells its portfolio of value-added chicken nuggets, wings and tenders; beef patties; and breaded fish fillets to quick-service behemoths such as McDonald’s Corp. The deal includes six processing plants and an innovation center in the United States, with locations in Alabama, Georgia, Kentucky, North Carolina, Pennsylvania and Wisconsin. Tyson will also take on global innovation centers in China, South Korea, Malaysia, Thailand and Australia.
“Keystone is a leading global protein company and will be a great addition to Tyson Foods,” said Tom Hayes, president and CEO of Tyson Foods. “This acquisition will expand our international presence and value-added production capabilities and help us deliver more value to our foodservice customers.
The acquisition will also lay the foundation for more international growth in the Asia Pacific, Europe, the Middle East and Africa, Hayes said. The companies expect the transaction to close in 2019.
Changing trade relationships and new entrants in the space has resulted in about 2.5-billion pound in meat piling up in cold-storage warehouses. In a third-quarter earnings call, Hayes said "uncertainty in trade policies and tariffs and increasing supplies of relatively low-priced beef and pork" were to blame for the company's less-than-satisfactory results.
In June, Tyson announced it would sell its Sara Lee Frozen Bakery and Van’s brands. Last year, the company spent billions to acquire ready-to-eat meal company AdvancePierre Food Holdings Inc. and cheese steak producer Philly Holdings Inc. in April and November, respectively.
Springdale, Ark.-based Tyson Foods produces, markets and exports chicken, beef and pork. Its brands include Jimmy Dean, Hillshire Farm, Ball Park, Wright, Aidells and State Fair. The company was founded in 1935.
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