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Pilgrim's Pride Acquires Tulip Limited, Expands Global Reach

Zacks Equity Research

Pilgrim's Pride Corporation PPC is committed toward enhancing competency on the back of buyouts. In this regard, the company closed the buyout of Tulip Limited from Danish Crown, which was announced in August. Funded with cash, Tulip Limited was valued at £290 million. With this acquisition, Tulip Limited will form a separate business segment under Pilgrim’s Pride.

The inclusion of Tulip Limited is likely to solidify Pilgrim’s Pride’s geographic presence and enhance its position in the pork market in the U.K. Markedly, Tulip Limited is one of the biggest pig producers in the U.K. The company, with annual sales of roughly £1 billion, offers an array of supreme quality, innovative products to foodservice and retail consumers. 

Per the deal, Danish Crown will keep providing Danish pork to Tulip Limited (as part of a long-term supply contract). This, in turn, will enable Tulip Limited to continue offering best quality products from European producers. Thus, Tulip Limited’s addition is expected to fortify Pilgrim’s Pride’s European business and expand its global reach.

Pilgrim’s Pride’s Growth Efforts in Place

Well, Pilgrim’s Pride has been pursuing buyouts and making efforts to expand offerings and strengthen the business. The acquisition of branded chicken products provider, GNP Company, is expected to keep bolstering driving Pilgrim’s Pride’s sales in the upcoming quarters. Additionally, the Moy Park acquisition (poultry and prepared foods provider) is beneficial for Pilgrim’s Pride’s European business.

This apart, Pilgrim's Pride consistently strives to improve portfolio and competitive position through innovation. In this respect, the company has been expanding in the fresh food offerings space. In fact, the launch of fresh chicken products under the premium Pilgrim's brand has been receiving favorable consumer response. Further, this Zacks Rank #3 (Hold) company is on track to expand in the gluten-free products category.



We expect such efforts to continue fueling the stock that has surged 68.4% in a year’s time, comfortably outpacing the industry’s growth of 20.3%.

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McCormick & Company MKC, with a Zacks Rank #2, has a long-term earnings per share growth rate of 8%.

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Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report
 
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