Tyson Foods Inc, the largest US meat producer, agreed to buy chicken nugget maker Keystone Foods LLC for about US$2.5 billion, a person familiar with the matter said.
Brazil’s Marfrig Global Foods SA, which is selling Keystone, would retain a US hamburger factory, said the person, who asked not to be identified because the transaction has not been formally announced.
The price of the deal is less than the US$3 billion initially expected after conditions in the US chicken market deteriorated, they said.
Demand in the US has softened and domestic supply has risen, Tyson said earlier this month.
Springdale, Arkansas-based Tyson and Marfrig declined to comment on the deal.
The Keystone deal comes at a time when US producers are grappling with weakening meat prices amid higher supplies and import tariffs imposed by China and Mexico in retaliation against US duties on metal shipments.
Keystone, which supplies nuggets to McDonald’s Corp, had revenue of US$2.8 billion last year.
It has operations in seven US states, as well as in South Korea, China, Malaysia, Thailand and Australia.
While its US assets account for about 70 percent of sales, the food service company has experienced stronger growth from its Asian arm.
Besides Tyson, Keystone attracted bids from Cargill Inc, China’s Cofco Ltd (中糧) and an unidentified Japanese firm, two people with direct knowledge of the matter said in June.
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