By buying the Nebraska-based firm, Tyson Foods hopes to push into the fast-growing organic chicken market.
Under the agreement, Tyson Foods will gain the Smart Chicken brand, along with two Nebraska plants and live-chicken operations supply them.
Headquartered in Waverly, Arkansas, Tecumseh Poultry produces organic fresh chicken and chicken sausages.
Tecumseh Poultry will operate as a separate subsidiary and will retain its 600 employees, according to Tyson Foods.
The deal underlines a growing race amongst the largest US poultry producers to tap into the thriving organic market segment.
Organic chicken sales rose almost 12% to $33mn over the year ending April 28, whilst conventional chicken sales grew only 3% to £7.7bn over the same period, according to data from Nielsen Perishables.
“Consumers want choices. More and more consumers want options for fresh, organic food that fits their lifestyles,” said Eric Schwartz, chief marketing officer of Poultry for Tyson Foods. “The Smart Chicken brand is a leader in this key organic category, and the category’s growth makes this acquisition a strategic fit for Tyson Foods.”
“This is a well-run company with a solid customer base that’s earned consumer loyalty,” added Doug Ramsey, group president of Poultry for Tyson Foods. "We’re excited for Tecumseh to continue to produce quality chicken while providing the business the scale and resources it needs to continue growing. Customers should continue to work with existing contacts.”
The acquisition adds to Tyson Foods organic product portfolio which includes its NatureRaised Farms and Aidells brands.
The financial details of the acquisition were not disclosed.
This week, Tyson Foods also revealed that it is to sell its non-meat businesses, Sara Lee Frozen Bakery and Van’s waffle and cereal business, to private equity firm Kohlberg & Co for an undisclosed sum.
The move comes as part of Tyson’s latest efforts to sell its non-protein businesses so that it can focus on its core offerings such as beef and chicken.