Source: Tom Johnston, MEATINGPLACE, 8/17/18


Tyson Foods Inc. has acquired chicken nugget maker Keystone Foods from Brazil’s Marfrig S.A. for $2.5 billion, according to a report by Reutersciting two unnamed sources “with knowledge” of the transaction. 

The deal, reportedly signed by Marfrig’s controlling shareholder Marcos Molina Thursday, helps Tyson in its continuing efforts to expand in value-added offerings. Keystone is the largest supplier of chicken nuggets to McDonald’s, and has operations in the United States, Korea, China, Malaysia, Thailand and Australia.

Tyson spokesman Gary Mickelson declined to comment on the reports.

Stephens Inc. equity analyst Farha Aslam’s view of the deal was mixed.

“The transaction does offer Tyson significant synergy opportunities and a solid international business, the deal does increase the Company's exposure to McDonald's, a restaurant chain that offers suppliers steady business but at thin margins,” she wrote in a note to investors this morning.

Marfrig began shopping Keystone in May to fund its purchase of National Beef Packing Co.for $969 million.

Keystone had $2.8 billion in sales and earnings before interest, taxes and amortization (ebidta) of $282 million in fiscal year 2017.
Tyson Foods officials declined to comment.

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