Sanderson Farms, the third-largest poultry producer in the United States, is approaching an agreement to sell its operation for a value of around US$4.5 billion, according to sources close to the negotiations. Interested companies include Cargill and Continental Grain Co., which has a smaller chicken processor. The deal can be closed on Monday.
The company has been attracting the interest of several applicants in recent months, due to the heated demand for its products. There are 13 aviaries distributed between North Carolina and Texas, with a total processing of almost 13.6 million chickens per week.
Growing demand for chicken breasts, wings and other products has boosted poultry prices as restaurants reopen after the peak of the covid-19 pandemic.
Wholesale breast prices are nearly double what they were at the beginning of the year, according to data from the US Department of Agriculture (USDA).
Sanderson’s sales for the quarter ended April 30 were up about a third and his profits jumped to $97 million from $6 million during the same period in 2020.
If Continental wins the dispute, the combination of Sanderson with the company’s brand, Wayne Farms, which is based in Georgia, would form a competitor that owns 15% of the country’s chicken production, according to data from Watt Poultry USA.
Tyson Foods leads the industry, with a fifth of the market, followed by Pilgrim’s Pride, which represents 16% of the national total.
Also with a relevant share of the food market, Cargill is an important chicken supplier in Asia and has other poultry operations in Canada, the United Kingdom and Latin America.
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