Pilgrim's Pride Corporation has made a proposal to cquire The Hillshire Brands Company for $45.00 per share in cash, in a transaction valued at $6.4 billion.

Pilgrim's all-cash proposal provides Hillshire shareholders with a substantially superior alternative to Hillshire's pending acquisition of Pinnacle Foods Inc., representing a 25 per cent premium to the volume weighted average price of Hillshire shares over the 10 trading days following the announcement of the Pinnacle transaction. Further, the transaction represents a compelling value to Hillshire shareholders at 12.5x Hillshire's trailing adjusted EBITDA, including the $163 million termination fee payable to Pinnacle.

The proposal has the unanimous support of the Board of Directors of Pilgrim's, as well as the support of JBS S.A., the majority owner of Pilgrim's. It is anticipated that the proposed transaction would close in the third quarter of 2014 and would be subject to customary closing conditions and the termination of Hillshire's merger agreement with Pinnacle. Pilgrim's expects to finance the acquisition with a combination of existing cash balances and new debt financing.

The transaction would create a leading branded, protein-focused company with strong, consistent earnings and complementary competencies:

• Strong Financial Profile: Together, the companies would have LTM combined revenues of $12.4 billion and EBITDA of $1.4 billion.
• Diversified and Complementary Product Portfolios and Customer Bases:
  • An attractive portfolio of Pilgrim's and Hillshire brands, including Pierce, Wing Dings, Jimmy Dean, Hillshire Farm, Ball Park and State Fair - all of which are number one or number two in their respective markets.
  • Pilgrim's strong operational efficiency systems and processes align with Hillshire's innovation and marketing capabilities.
  • Complementary channels with shared culture of partnering with customers - Pilgrim's expertise in food service brand and supermarket deli and Hillshire's experience in retail.
• Strong Synergy and Growth Opportunities: Pilgrim's expects cost synergies to come from operational and value-chain efficiencies and significant growth opportunities in higher margin branded products, both in North America and internationally.
• Maintaining Hillshire's Presence in Chicago: Appreciating the importance of Hillshire's heritage and connections with the communities in which it operates, Pilgrim's intends to make Chicago a major center of North American operations.

Bill Lovette, Pilgrim's Chief Executive Officer, commented: "Our proposal creates considerable value for the shareholders of both Pilgrim's and Hillshire.

"For Hillshire shareholders, our proposal provides a substantial premium, greater certainty and immediate cash value for their shares. We have long respected the Hillshire business and we are confident that Hillshire's Board and shareholders will find our all-cash premium proposal to be superior to the pending acquisition of Pinnacle.

"For Pilgrim's, the addition of Hillshire's portfolio of iconic brands and broad based marketing, innovation and distribution expertise will enhance our position as a market leader. With our complementary products, we believe that together Pilgrim's and Hillshire will better serve our combined customer bases for the benefit of all our stakeholders. We look forward to working constructively with Hillshire to sign a definitive merger agreement and quickly realize the benefits of this combination."

Hillshire Responds to Offer

The Hillshire Brands Company issued the following statement in response to the unsolicited proposal by Pilgrim's Pride Corporation, saying: “We continue to strongly believe in the strategic merits and value creation potential provided by the proposed transaction with Pinnacle Foods. Consistent with its fiduciary duties, and in consultation with its independent financial and legal advisors, Hillshire Brands’ Board will thoroughly review the Pilgrim’s Pride proposal.”