Tyson Foods Inc. said Monday that it's buying Keystone Foods, a major chicken supplier to restaurants including McDonald's Corp., for $2.16 billion in cash.
Arkansas-based Tyson Foods (NYSE: TSN) said it's buying Keystone from Marfrig Global Foods of Brazil.
Pennsylvania-based Keystone supplies chicken, beef, fish and pork to some of the world’s leading quick-service restaurant chains, including chicken nuggets to Oak Brook, Illinois-based McDonald's (NYSE: MCD).
“This acquisition will expand our international presence and value-added production capabilities and help us deliver more value to our food service customers. Keystone provides a significant foundation for international growth with its in-country operations, sales and distribution network in high growth markets in the Asia Pacific region as well as exports to key markets in Europe, the Middle East and Africa," said Tom Hayes, president and CEO of Tyson Foods, in a statement.
Reuters reported that after the sale, Marfrig will concentrate on its beef production. The company's chief financial officer told Reuters that Marfrig more than doubled Keystone's value from the $1.2 billion paid in 2010 when it originally acquired it.
The sale includes six processing plants in the U.S. with locations in Alabama, Georgia, Kentucky, North Carolina, Pennsylvania and Wisconsin, but does not include a beef patty processing plant in Ohio. Also included are eight plants in China, South Korea, Malaysia, Thailand and Australia.
Keystone employs approximately 11,000 people. In the past year, it reported annual revenue of $2.5 billion. In the past year, Keystone said it generated about 65 percent of its revenue from U.S.-based production and the remaining 35 percent from its Asia Pacific plants.
The Wall Street Journal reported that Tyson is the largest U.S. meat supplier by sales and that Tyson will finance the deal using cash and new debt. It also added that Marfrig is the world’s second-largest beef processor.
