Exclusive: Tyson weighs $2 billion-plus deal for Michael Foods - sources
By Olivia Oran, Soyoung Kim and Greg Roumeliotis
NEW YORK (Reuters) - Tyson Foods Inc (TSN.N: Quote) is exploring a bid for Michael Foods Group Inc, a deal that would combine one of the world's largest chicken processors with a large distributor of egg and dairy products, according to three people familiar with the matter.
A potential deal for Michael Foods, which is seen worth between $2 billion and $2.5 billion according to the people, would place Tyson, the nation's largest meat producer, into an adjacent category within poultry and protein.
Michael Foods, the egg and dairy products producer owned by Goldman Sachs Group Inc's (GS.N: Quote) private equity unit, is in the early stages of finding a buyer, and Tyson may ultimately choose not to move forward with an offer, the people cautioned.
Michael Foods is working with Goldman Sachs' investment banking unit and Bank of America Merrill Lynch (BAC.N: Quote) on a potential sale, Reuters reported in December.
The sources declined to be named because the matter is private. Tyson Foods and Michael Foods declined to comment. A Goldman Sachs spokeswoman did not immediately respond to a request for comment.
Minnetonka, Minnesota-based Michael Foods produces and distributes products including specialty eggs, refrigerated potatoes, cheese and other dairy products.
Tyson Foods, which has a market cap of around $12 billion, has traditionally shunned large acquisitions. The last major acquisition it made was its 2001 purchase of IBP Inc for $3.2 billion, which helped transform the company into the world's largest meat producer and processor.
A tie-up between Tyson and Michael Foods would bring synergies on the poultry side of the business as both companies raise chickens. Continued...