Tyson Foods, Inc. (NYSE: TSN ) saw a slight drop to its stock on Tuesday following news that it is buying up assets.
Source: Quinn Dombrowski via Flickr
The news from Tyson Foods, Inc. is that it is planning to buy assets from American Proteins, Inc. and AMPRO Products, Inc. This will have it acquiring the two companies' rendering and blender assets.
Tyson Foods, Inc. says that the acquisition of these assets will allow it to expand its business into the animal food market. This will let it recycle more of the waste from its poultry and can help it cut down on greenhouse gas emissions.
The deal will have Tyson Foods, Inc. buying up four rendering plants located in Georgia and Alabama. It will also acquire 13 blender facilities that are spread across the Southeastern and Midwestern parts of the U.S.
Tyson Foods, Inc. says that it will be spending a total of $850 million to acquire all of these assets. It expects to see some synergies from the acquisition. The company also notes that it is looking for the deal to generate $500 million in net sales over the next 12 months.
Tyson Foods, Inc. also points out that there are about 700 employees working at the plants belonging to American Proteins, Inc. It says that it is expecting most of these employees to join it as new members of the company.
"American Proteins' management team has built a great business and the production teams have done a wonderful job making animal feed ingredients for years," Doug Ramsey, group president of poultry for Tyson Foods, Inc., said in a statement . "We admire the company and believe this will be a good cultural fit."
TSN stock was down 1% as of noon Tuesday.
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As of this writing, William White did not hold a position in any of the aforementioned securities.