Tyson’s Filet-O-Fish acquisition faces scrutiny

Published on
August 2, 2018

Poultry giant Tyson Foods’ potential purchase of Keystone Foods, which makes chicken nuggets and Filet-O-Fish for McDonald’s, faces scrutiny by the United States government.

Tyson is in exclusive talks with Marfrig Global Foods SA in Brazil, which owns Keystone, to buy the food processor, according to Bloomberg. Marfrig aims to raise more than USD 3 billion (EUR 2.6 billion) from the sale.

However, the potential acquisition could cause “significant competitive concerns” about consolidation in the poultry industry, wrote Jeremy Scott, a Mizuho Securities USA analyst in a note, Bloomberg reported. Already, four companies, including Tyson, control more than half of U.S. chicken processing.

Scott said it is also uncertain whether Tyson would be interested in Keystone’s international units in North America, Asia-Pacific, Middle East, and Africa.

Tyson is experiencing financial challenges as well, due to new U.S. tariffs on foreign goods. Tyson’s stock stumbled on 30 July, after the company cut its expected earnings per share for fiscal year 2018 from a range of USD 6.55 (EUR 6.50) to USD 6.70 (EUR 5.73) to between USD 5.70 (EUR 4.87) to USD 6.00 (EUR 5.13).

"The combination of changing global trade policies here and abroad, and the uncertainty of any resolution, have created a challenging market environment of increased volatility, lower prices and oversupply of protein," Tyson President and CEO Tom Hayes said in a statement.

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