Pinnacle Foods said on Monday that it was terminating its merger agreement with Hillshire Brands, clearing the final obstacle for Hillshire to sell itself to Tyson Foods for $7.7 billion.
Pinnacle will receive a $163 million breakup fee as a result of the termination, according to a story in the New York Times. The company plans to use the proceeds to reduce debt, it said in a news release.
Hillshire’s board said on June 16 that it would no longer recommend the Pinnacle transaction to its shareholders ahead of a vote on the proposed takeover. That freed Pinnacle to call off the merger agreement and collect its breakup fee.
Under the terms of the reported deal, Tyson will pay $63 a share for Hillshire.