US food firm Pilgrim’s Pride Corporation has announced it has signed a contract to acquire the UK’s largest pig producer Tulip Limited.
As part of the £290 million deal, Tulip’s 12 fresh and value-added operations in the UK will transfer to Pilgrim’s from Danish Crown.
Jayson Penn, Pilgrim’s global chief executive officer, said the deal would strengthen Pilgrim’s European foods offering.
It comes just two years after Pilgrim’s $1.3 billion takeover of Moy Park from its parent company JBS SA.
“The transaction represents the logical next step in our evolution to expand our geographical footprint, enhance our value-added portfolio and reduce volatility across our business with a more stable margin profile,” Penn said.
Tulip Limited’s integrated production platform, consumer-ready innovation capabilities, well-invested assets, established customer relationships and strong leadership team will solidify Pilgrim’s platform for growth in the attractive UK market.
Tulip chief executive Andrew Cracknell said: “Pilgrim’s is acquiring an industry-leading farming operation, a strong team of dedicated people and a network of well-invested manufacturing sites.
“Our companies share a rich heritage in agriculture and food production with aligned values that put people and customers at the heart of all we do.
“The Tulip Limited leadership team and I look forward to working with our new colleagues to build upon the fantastic progress made within the business and realise our combined growth opportunities as we enter an exciting new phase.”
Tulip Limited, like Pilgrim’s, has a long heritage in agriculture and protein production. The company is the largest pig producer in the UK, with nearly £1 billion in annual sales and more than 6,000 employees.
However, the firm had recently come under tougher times earlier this year when Tulip warned it may have to close its plant in Boston, Lincolnshire after the loss of a major retail contract.
Late last year Danish Crown also blamed poor performance in its UK arm for its failure to meet strategic targets.
Under terms of the agreement, Danish Crown will continue to supply Danish pork to Tulip under a long-term supply agreement.
Jais Valeur, Danish Crown group chief executive officer, explained: “Pilgrim’s is already strongly positioned within the UK chicken market and would like to strengthen its position within the market for pork. On our part, we want to simplify our UK business.
Going forward, we will supply Danish pork to Pilgrim’s, so all in all, the transaction holds out interesting perspectives for both parties.
Pilgrim’s employs more than 51,400 people and operates chicken processing and prepared-foods facilities in 14 U.S. states, Puerto Rico, Mexico, the UK and continental Europe.
Tulip employees more than 6,000 people and provides a wide range of innovative, quality meat products to the retail and foodservice sectors.
The company is the country’s largest pig producer and operates 12 production facilities throughout the UK.
