Tyson Scrambles to Regain Chicken Profit as New Competitor Looms

Tyson Foods Inc., the top poultry producer in the U.S., is racing to get its chicken unit back on track as a new, formidable competitor emerges.

The third and sixth biggest U.S. chicken companies, Sanderson Farms Inc. and Wayne Farms Inc., are combining in a $4.53 billion deal, according to a statement Monday from buyers Cargill Inc. and Continental Grain Co. The deal comes as Tyson’s chicken unit posted a loss in its third quarter amid a series of headaches including high feed prices, production challenges and millions in legal costs stemming from price-fixing lawsuits.

A bigger, better version of Sanderson Farms isn’t good news for Tyson. The company is “arguably the best chicken producer in the country, and perhaps the world,” JPMorgan Chase & Co. analysts including Ken Goldman said in a note. Returns over the years have been better than Tyson’s, and its market share increased as a result.

To read the rest of the story, please go to: Yahoo