Tyson Foods (TSN) agreed to buy McDonald’s (MCD) supplier Keystone Foods for about $2.5 billion, nabbing the Chicken McNuggets maker at a discount after market conditions worsened, according to reports.
The deal came in under an expected $3 billion. Bloomberg reported the story initially, with Reuters also reporting the same details. Reuters first reported that Tyson was in talks in late July to buy Keystone.
Brazilian meatpacker Marfrig, which is selling Keystone, will hold on to a U.S. hamburger factory, Bloomberg said.
In addition to chicken McNuggets, Keystone also makes beef patties, ready-to-cook chicken wings and fish fillets.
Marfrig and Arkansas-based Tyson declined to comment to Bloomberg and Reuters.
Shares of Tyson Foods closed up 2.4% at 62.40 on the stock market today, building on a recent rally after a multimonth decline. McDonald’s stock lost 0.4% Friday but has retaken the 50-day moving average this week.
Chicken McNuggets Are A Big Deal For Tyson
The Keystone purchase would mark Tyson’s second largest acquisition after its AdvancePierre Foods purchase last year.
Despite the acquisition of another meat supplier, CEO Tom Hayes has plans to shift Tyson from a producer of meat to a producer of proteins more broadly, including plant-based protein products.
Meanwhile, the company is grappling with the fallout from Trump’s trade war. Shares plunged in July after the meat producer lowered its profit forecast. It cited an escalating U.S. trade dispute with major importers of agricultural products.
In August, Tyson spoke of weakening U.S. demand and rising supplies amid retaliatory import duties from China and Mexico in response to Trump trade tariffs.
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