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June 22, 2021

US poultry major Sanderson Farms ‘exploring sale’

US media outlets suggest a sale of the business is being considered eight months after a previous offer was turned down.

Sanderson Farms, the US poultry processing heavyweight, is said to be weighing up the sale of the business.

The Wall Street Journal (WSJ) newspaper, quoting a source familiar with the matter, reported the Mississippi-based company has drawn interest from buyers including agricultural investment firm Continental Grain Co, which owns a smaller chicken processor, Wayne Farms.

In October last year, Sanderson Farms rejected an “unsolicited” takeover proposal from New York-based investment firm Durational Capital Management.

Nasdaq-listed Sanderson said at the time its board had “unanimously” dismissed the approach by Durational Capital, an investor focused on consumer goods which is a shareholder in the business.

With regard to its current situation, the WSJ – in a report carried by other major media outlets in the US – said that any deal with Continental Grain would form a company producing about 15% of the country’s chicken meat.

In May, Sanderson, which operates 13 poultry plants and processing facilities and employs more than 18,000 people, reported net sales of US$1.34bn in Q2 of its fiscal 2021. This compared to $844.3m in the same period a year earlier. Net income was $96.9m compared to $6.1m for the Covid-hit period 12 months earlier.

Just Food asked Sanderson Farms and Continental Grain Co. to comment on the media reports outside of US office hours.

A Sanderson spokesperson said it is company policy not to comment on market rumours or speculation.

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