CALIFORNIA, Livingston. Meat processor Tyson Foods has held talks about buying privately owned California-based Foster Farms for roughly $2 billion, people familiar with the situation tell CNBC. The two sides are disagreeing over price and it is possible the talks fall apart. If a deal is consummated, it is still at least several weeks away.
Tyson, one of the biggest food companies in the US by sales, supplies meat to restaurants and other food-service customers. It also sells branded chicken, beef, and pork under labels like Jimmy Dean, Hillshire Farm and Golden Island Jerky.
The deal talks come just months after Tyson closed its $2.16 bn. acquisition of McDonald's meat supplier Keystone Foods, which further expanded its capabilities in Asia.
An acquisition of a US brand like Foster Farms, which makes products like branded chicken, turkey and frozen foods, would therefore mark a mild change in course for Tyson. It would instead echo a strategy it pursued in 2014, with its $7.7 bn. acquisition of Hillshire Brands, which brought with it Jimmy Dean sausages and Ball Park hot dogs.
Foster Farms was founded in in 1939 by Max and Verda Foster. It owns farms in California and Louisiana, and also works with 30 family-owned farms in Washington and Oregon. In 2016, it named Laura Flanagan its CEO, taking over for Ron Foster, grandson of the company's founder.
The people requested anonymity because the talks are confidential. Tyson said it does not comment on rumors or speculation. A spokesperson for Foster Farms did not respond to requests for comment.