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No cheap deal: Chicken processor interested in Minnesota egg producer

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One of the world's largest chicken processors may take a run at a Minnesota egg and dairy producer.

In an exclusive report, Reuters quotes "three people familiar with the matter" who say that Tyson Foods is exploring a bid for Michael Foods Group Inc, based in Minnetonka. The deal could be worth between $2 billion and $2.5 billion. The story points out that "...a tie-up between Tyson and Michael Foods would bring synergies on the poultry side of the business, as both companies raise chickens."

Michael Foods is owned by Goldman Sachs Group Inc's private equity unit. The Michael Foods website says that it is he world's largest egg processing company and that it produces and distributes products including specialty eggs, refrigerated potatoes, cheese and other dairy products. Consumer products from the company are sold under the Crystal Farms, Simply Potatoes, AllWhites and Better'n Egg labels. Potatoes are prepared and packaged at a Chaska plant.

Michael Foods also markets products for the food service, catering and commercial baking businesses. Last November, the Business Journal reported that Michael Foods is the state's 16th largest private company with $1.77 billion in annual sales.

The story notes that Arkansas-based Tyson Foods has traditionally shunned large acquisitions. The last major acquisition it made was its 2001 purchase of IBP Inc for $3.2 billion. Formerly known as Iowa Beef Processors, the addition of the South Dakota-based company helped to transform Tyson into the world's largest meat producer and processor

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