Key Points:
- Smithfield Foods is acquiring Nathan’s Famous hot dog brand for $450 million in cash, or $102 per share. The deal is set to close in the first half of 2026.
- Smithfield’s CEO, Shane Smith, believes the acquisition will open up new growth opportunities for the company’s packaged meats business, its largest segment.
- Since 2014, Smithfield has held an exclusive license to manufacture Nathan’s Famous in the US, Canada, and Sam’s Clubs in Mexico, with the license expiring in March 2032.
Insights:
The 110-year-old Nathan’s Famous, famous for its Coney Island hot dog eating contest, has had a strong connection to Smithfield for over a decade. The acquisition aims to strengthen this relationship and enhance Smithfield’s packaged meat business.
Smithfield expects the purchase to boost long-term sales and cash flow, improve margins, and expand Nathan’s portfolio across retail and foodservice channels. The acquisition will also help Smithfield establish a presence in the beef market.
The deal is projected to generate annual cost synergies of around $9 million by the second anniversary of closing. Nathan’s, known for its hot dogs sold in various outlets, also operates over 200 restaurants globally and recorded $148 million in revenue in 2024.