Chicken producer Sanderson Farms nears $4.5 billion sale

Cara Lombardo, Jacob Bunge

Sanderson Farms Inc. is nearing a deal to sell itself for around $4.5 billion, according to people familiar with the matter, as the poultry giant rides a wave of demand for chicken products.

Sanderson /zigman2/quotes/201978364/composite SAFM -0.06% is in advanced talks with Cargill Inc. and agricultural-investment firm Continental Grain Co., which owns a smaller chicken processor, the people said. The deal could be finalized by Monday, they said.

It would value Sanderson at $203 a share, about 30% above the price before The Wall Street Journal reported in June that the company had  attracted interest from suitors  including Continental.

Mississippi-based Sanderson is the country’s third-biggest chicken producer. It runs 13 poultry plants from North Carolina to Texas, processing about 13.6 million chickens a week. The company supplies grocery chains including Walmart Inc. /zigman2/quotes/207374728/composite WMT +0.91%  and Albertsons Cos. /zigman2/quotes/209620932/composite ACI +2.16% as well as restaurant distributors like Sysco Corp. /zigman2/quotes/205335941/composite SYY -1.87%  and U.S. Foods Holding Corp.  /zigman2/quotes/202988961/composite USFD -0.91% .

Combining Sanderson with Georgia-based Wayne Farms LLC, a poultry company owned by Continental, would form a new competitor representing about 15% of U.S. chicken production, according to data from Watt Poultry USA. Tyson Foods Inc. /zigman2/quotes/201117502/composite TSN +1.41%  leads the industry with about one-fifth of the market, while Pilgrim’s Pride Corp.  /zigman2/quotes/204152423/composite PPC +0.28%  represents about 16% of the national total.

An expanded version of this report appears on WSJ.com.

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/zigman2/quotes/201978364/composite

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Sanderson Farms Inc.

US : U.S.: Nasdaq

$ 186.39

-0.11 -0.06%

Volume: 107,134

Oct. 20, 2021 4:00p

P/E Ratio

13.93

Dividend Yield

0.94%

Market Cap

$4.16 billion

Rev. per Employee

$204,315

/zigman2/quotes/207374728/composite

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Walmart Inc.

US : U.S.: NYSE

$ 146.00

+1.31 +0.91%

Volume: 5.82M

Oct. 20, 2021 4:00p

P/E Ratio

41.15

Dividend Yield

1.51%

Market Cap

$403.47 billion

Rev. per Employee

$243,109

/zigman2/quotes/209620932/composite

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Albertsons Cos. Inc.

US : U.S.: NYSE

$ 28.91

+0.61 +2.16%

Volume: 1.64M

Oct. 20, 2021 4:00p

P/E Ratio

24.35

Dividend Yield

1.66%

Market Cap

$13.20 billion

Rev. per Employee

$232,301

/zigman2/quotes/205335941/composite

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Sysco Corp.

US : U.S.: NYSE

$ 79.82

-1.52 -1.87%

Volume: 2.74M

Oct. 20, 2021 4:00p

P/E Ratio

78.14

Dividend Yield

2.36%

Market Cap

$41.67 billion

Rev. per Employee

$884,446

/zigman2/quotes/202988961/composite

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US Foods Holding Corp.

US : U.S.: NYSE

$ 36.99

-0.34 -0.91%

Volume: 1.35M

Oct. 20, 2021 4:00p

P/E Ratio

N/A

Dividend Yield

N/A

Market Cap

$8.31 billion

Rev. per Employee

$880,192

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Tyson Foods Inc. Cl A

US : U.S.: NYSE

$ 81.23

+1.13 +1.41%

Volume: 1.46M

Oct. 20, 2021 4:00p

P/E Ratio

12.60

Dividend Yield

2.19%

Market Cap

$28.66 billion

Rev. per Employee

$310,683

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Pilgrim's Pride Corp.

US : U.S.: Nasdaq

$ 28.92

+0.08 +0.28%

Volume: 398,734

Oct. 20, 2021 4:00p

P/E Ratio

N/A

Dividend Yield

N/A

Market Cap

$7.03 billion

Rev. per Employee

$214,342