Sanderson Farms Logo

Sanderson Farms Logo

•$4.5B deal will combine company with Wayne Farms

•Wayne Farms CEO Clint Rivers will lead business 

•Deal expected to be complete by end of ’21 or early ’22

A local business whose humble beginnings were in chicken feed sold for a whole lot of scratch on Monday. Laurel-based Sanderson Farms, which is the only Fortune 1000 company in the state, is being purchased for a lot more than chicken feed. Laurel-based Sanderson Farms is being purchased for $4.53 billion in a transaction that will combine Sanderson and Wayne Farms, which is a subsidiary of Continental Grain Co. Wayne Farms CEO Clint Rivers will lead the combined business.

“The combination of Sanderson Farms and Wayne Farms will create a best-in-class U.S. poultry company with a high-quality asset base, complementary operating cultures and an industry-leading management team and workforce,” according to a press release from deal broker Cargill, Inc.“ The new company will be well positioned to enhance its service to customers across retail and food service and drive organic growth in an industry fueled by affordability and key consumer trends around the health, sustainability and versatility of chicken.”

Sanderson CEO and Chairman Joe Frank Sanderson said he is confident that the deal will be good for employees and customers.

“Since my grandfather founded Sanderson Farms 75 years ago, our many significant achievements have been driven by our commitment to providing the very best chicken products in a profitable manner that benefits each of the constituents who contribute to our success,” he said in a press release. “This transaction is the culmination of that commitment, as it delivers a significant value to our stockholders, reflecting the dedication of our team and our best-in-class assets, quality products, efficient and sustainable operations and respected brand.

“We are proud to be joining with Cargill and Continental Grain and we are confident that they will be strong stewards of the Sanderson Farms team, brand and assets going forward. As part of the newly created company, Sanderson Farms and its new owners will remain committed to the employees, poultry producers, customers, communities, environment, and animals under our care, and to continuing to deliver the highest quality products and the best service in our industry to our customers.”

The purchase price of $203 per share represents a 30.3 percent premium to Sanderson Farms' unaffected share price of $155.74 on June 18, 2021, which was the last full trading day prior to media speculation about the potential sale of Sanderson Farms.

The Jones County Economic Development Authority has enjoyed a wonderful working relationship with Sanderson Farms over the years, said Ross Tucker, president of that agency.

“Sanderson Farms has been a cornerstone of our community since it was founded 75 years ago,” Tucker said. “Their commitment to excellence has extended past their business and into our community. Jones County has been touched by Sanderson’s generosity and involvement for many years. 

“It is wonderful to see them reach this milestone with companies that share similar principles of supporting farmers and communities, and we look forward to working with the new joint venture. It has been a privilege to grow with Sanderson Farms and watch them achieve great success here in our shared home.” 

Sanderson officials would not respond to reports of the rumors about the possible sale back in June, when company stock soared.

Local officials and business leaders were concerned about those reports. Though production workers and producers would still be needed no matter what the company name is, the loss of higher-paying corporate jobs at the company headquarters off Flynt Road would be a blow to the community, several leaders said on the condition of anonymity. Others who are familiar with the company noted that most of its leaders are close to or beyond retirement age and don’t have children or other close family members in top-tier positions to take the reins.

Sanderson employs approximately 1,100 people in Laurel — 450 on salary, 650 hourly, CFO Mike Cockrell said at the time. There are 400 or so employees at the headquarters. That number includes about 50 trainees who are not at the office every day “but are working at various company locations across the states in which we operate,” Cockrell said.

Continental Grain Chairman and CEO Paul Fribourg said, “We are very happy to partner with Cargill, with whom we have had a decades-long relationship between two family-owned companies. Sanderson Farms’ operations, best-in-class assets and valuable brand have underscored their success, and we have the highest respect for Joe Sanderson and the business and team he has built as the third-generation CEO. 

“Wayne Farms has been one of the most important and successful parts of Continental Grain for almost 60 years, so bringing together two great partners with two great poultry companies will ensure good things for our customers, our grower partners and our employees.”

The new company will have state-of-the-art operations and will continue to invest in its workforce and in employee safety, according to the press release. Operations will include poultry-processing plants and prepared foods plants across Alabama, Arkansas, Georgia, Louisiana, Mississippi, North Carolina and Texas.

“At Cargill, we are committed to nourishing the world in a safe, responsible and sustainable way,” said David MacLennan, chairman and CEO of Cargill. “Expanding our poultry offerings to the U.S. is a key enabler of our ability to meet customer and consumer demands. With these great businesses and our strong partnership, we believe we will deliver a superior portfolio of products and services to our customers.”

Cargill expects to support the new joint venture with its longstanding relationships with retail and food-service customers. Wayne Farms, part of Continental Grain's food, agriculture and commodities investment portfolio since 1965, has roots in the poultry industry that go back more than a century.

The transaction is expected to close by the end of 2021 or early 2022 and will be subject to regulatory and Sanderson Farms stockholder approval and other customary closing conditions. The acquisition consortium has committed equity and debt financing in place to complete the transaction.

Upon the completion of the transaction, Sanderson Farms will become a private company, and its shares will no longer be traded on NASDAQ.

BofA Securities acted as the financial adviser to Cargill and Freshfields Bruckhaus Deringer (US) LLP acted as legal counsel. Gibson Dunn & Crutcher acted as tax counsel.

Centerview Partners LLC acted as financial advisor to Sanderson Farms and Wachtell Lipton Rosen & Katz and Fishman Haygood LLP acted as legal counsel.

Lazard acted as the financial adviser for Wayne Farms and Continental Grain, and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal counsel.

Cargill has 155,000 employees across 70 countries, connecting farmers with markets, customers with ingredients and people and animals with the food they need to thrive. 

Conti is a privately owned global investor, owner and operator of companies with more than 200 years of history across the food and agribusiness spectrum. 

Wayne Farms LLC is a U.S. poultry producer that is a subsidiary of Continental Grain Company. It owns and operates fresh and further-processed facilities throughout the Southeast and employs more than 9,000.

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(1) comment

MilesWRich

Laurel, beware. This is just another amalgamation that will take good paying management and clerical jobs from Laurel. Some people may be offered transfers, but even if that occurs, those people and their dollars will leave Laurel. You should hope that the feds take a u turn and stop approving these anti competitive mergers that eventually make a few stockholders very wealthy and leave small cities like Laurel holding the bag. You may look at my Facebook account and write off my opinion as the rantings of a "liberal". Well let me tell you, the smaller cities of America are littered with closed corporate offices, and factories. My family own Louis Rich, once the country's largest processor of turkeys. We sold out to Oscar Mayer in 1979 in a deal that only involved an exchange of stock valued at $29 Million. Less than two years later, General Foods bought Oscar Mayer. Then General Foods sold out to Philip Morris, which in turn bought Kraft and merged General Foods into Kraft. 25 years later, Kraft and Heinz merged. When we first sold out, all our corporate managers were told, "you have a job, nothing will change." In a few years, our Davenport, Iowa corporate office closed. A few people were transferred to Madison, WI where Oscar Mayer was headquartered. The rest had to find new jobs. Kraft fired Oscar Mayer's national sales force, deciding that their sales people could sell meat and salad dressing. About 12 years ago, Kraft determined that having a turkey brand and a meat brand was unnecessary. Goodbye, Louis Rich. In the 1990s after turkey sales stagnated for a year or so, Kraft closed a brand new Louis Rich Plant in California where we once dominated the market, and turned it into a cheese plant they recently closed. Two years later, they announced they were closing our former main plant in the small town of West Liberty, Iowa. The turkey growers in Iowa were flabbergasted but they were able with state government help to get the money together to buy the West Liberty plant. They formed a coop and a company, West Liberty Foods, and kept the plant help and managers and have built a very successful food service business that Oscar Mayer had abandoned 15 years before. For West Liberty, they are a success story. But that town of 3000 was lucky. However, that was strictly amanufacturing plant when we sold it. On the other hand, about ten years ago, all Oscar Mayer corporate jobs were eliminated in Madison, and three or so years ago, the last.production there was shut down. Madison's largest private employer was gone. Madison is lucky. It's the state capital, home to the University of Wisconsin, home to a large insurance company, and a growing area in a state that is not growing. What will happen to Laurel? According to the article, Sanderson is the only Forbes 1000 companies in the entire state of Mississippi. Now there will be none. Sanderson will be absorbed by Wayne Farms. It may take a while, but eventually all those higher paying corporate jobs and most if not all of the support clerical jobs will also disappear. What can you do? Contact your representatives in Washington. We still have anti trust laws. Unfortunately, the Reagan Administration stopped enforcing them in the 1980s and with few exceptions, it's been a downhill slope ever since. This merger benefits no one except the current Sanderson stockholders. The stock started to soar in June on these rumors and most likely leaks of inside information. I know Laurel is now more well know across the country because of HGTV's, Hometown. Stop this acquisition. Failure to do so is at your peril. Unfettered capitalism is not a good thing. If you think it is, you are about to enter the Laurel school of hard knocks.

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