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Sanderson Farms Inc. is nearing a deal to sell itself for around $4.5 billion, according to people familiar with the matter, as the poultry giant rides a wave of demand for chicken products.
Sanderson
SAFM,
is in advanced talks with Cargill Inc. and agricultural-investment firm Continental Grain Co., which owns a smaller chicken processor, the people said. The deal could be finalized by Monday, they said.
It would value Sanderson at $203 a share, about 30% above the price before The Wall Street Journal reported in June that the company had attracted interest from suitors including Continental.
Mississippi-based Sanderson is the country’s third-biggest chicken producer. It runs 13 poultry plants from North Carolina to Texas, processing about 13.6 million chickens a week. The company supplies grocery chains including Walmart Inc.
WMT,
and Albertsons Cos.
ACI,
as well as restaurant distributors like Sysco Corp.
SYY,
and U.S. Foods Holding Corp.
USFD,
Combining Sanderson with Georgia-based Wayne Farms LLC, a poultry company owned by Continental, would form a new competitor representing about 15% of U.S. chicken production, according to data from Watt Poultry USA. Tyson Foods Inc.
TSN,
leads the industry with about one-fifth of the market, while Pilgrim’s Pride Corp.
PPC,
represents about 16% of the national total.
An expanded version of this report appears on WSJ.com.
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