1) Briefly describe the characteristics of this deal. Why is it being done? What happened to the stock price when the deal was announced? You can see the price reaction if you go to Charts:Price on Factset and then select Events:High Impact News.
2) 5 points. Why might the merger work? Why might the merger fail? Use ideas from our notes.
FACTSET streetaccount Cargill, Continental Grains confirm deal to purchase Sanderson Farms for $203/share in cash ($182.37, 0.00) Monday, August 09, 2021 11:09:27 AM (GMT) The parties have reached a definitive agreement for a joint venture between Cargill and Continental Grain to acquire Sanderson Farms for $203 per share in cash, representing a total equity value for Sanderson Farms of $4.53 billion. . Upon completion of the transaction, Cargill and Continental Grain will combine Sanderson Farms with Wayne Farms, a subsidiary of Continental Grain, to form a new, privately held poultry business. The transaction is expected to close by the end of 2021 or early 2022, and will be subject to regulatory and Sanderson Farms stockholder approval, and other customary closing conditions. The acquisition consortium has committed equity and debt financing in place to complete the transaction. Wayne Farms CEO Clint Rivers will lead the combined company. Upon the completion of the transaction, Sanderson Farms will become a private company, and its shares will no longer be traded on NASDAQ. BofA Securities acted as the financial advisor to Cargill; Centerview Partners acted as financial advisor to Sanderson Farms; Lazard acted as the financial advisor for Wayne Farms. StreetAccount notes that the announcement confirms last night's WSJ story. Reference Links: Press release Industries: Crops, Food Processing Primary Identifiers: SAFM-US, 00161G-E Related Identifiers: SAFM-US, 00161G-E Subjects: M&A Significant Announcements, Mergers and Acquisitions, Top Stories Related Stories: Sanderson Farms halted; news pending ($182.37, 0.00) Sanderson Farms nearing deal to sell itself to Cargill and Continental Grain for -$4.5B, or $203/share - WSJ ($182.37, 0.00) Sanderson Farms, Inc. (SAFM-US) $188.85 D -0.8500 (-0.45%)4:00:00 PM USD Nov 3, 2020 - Nov 3, 2021, Dai Price O: 142.16 H: 146.35 L: 141.58 C: 145.21 Volume Underlay X 178428 188.85 mo 185.34 180.00 170.00 160.00 // may my 150.00 140.00 ws MM 130.00 V 2021 Feb Mar Apr May 12-03-2020 Jun Jul Aug Sep Oct Nov
