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Diving overview:
- Smithfield Foods acquires hot dog brand Nathan’s Famous. It has $450 million in cash, or $102 per share. The transaction is expected to be completed in the first half of 2026.
- Smithfield CEO Shane Smith said the acquisition will allow the meat giant to “unlock new growth opportunities” for its packaged meat business, the Virginia-based company’s largest segment.
- Smithfield has held the exclusive license to manufacture Nathan’s Famous within Sam’s Clubs in the United States, Canada and Mexico since 2014. The license is scheduled to expire in March 2032.
Dive Insights:
Best known for its Coney Island Fourth of July hot dog eating contest, the 110-year-old Nathan’s has had a close relationship with Smithfield for more than a decade. Now the pork processor aims to further cement that relationship with the acquisition of the popular Frank brand.
Smithfield said in a statement that the acquisition will strengthen its long-term sales and cash flow while also improving margins in its packaged meat business. Smithfield also owns Farmland, Eckrich and the namesake brands.
The meat giant also noted that the acquisition will expand Nathan’s portfolio to build customer awareness across Smithfield’s retail and foodservice sales channels. Nathan’s all-beef franks also solidify Smithfield’s position in the beef category, which has been a small part of the company’s pork portfolio.
“We have invested significantly to build and grow the Nathan’s Famous brand since we signed our licensing agreement in 2014,” said Smith. “With our manufacturing scale, marketing strength, product innovation capabilities, and retail and foodservice channel expertise, the acquisition of Nathan’s Famous will allow us to take our brand to new heights.”
The transaction is expected to achieve annual cost synergies of approximately $9 million by the second anniversary of closing.
Nathan’s, which sells hot dogs and other products in stores, theme parks, movie theaters and other outlets, operates or franchises more than 200 restaurants worldwide. The New York-based food manufacturer in fiscal 2024. It recorded revenue of $148 million.comparison Smithfield’s net sales were $14.1 billion.
