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Smithfield Foods, a leading meat packing company based in Virginia, has announced the acquisition of Nathan's Famous, the iconic Coney Island hot dog brand, for $450 million. Nathan's Famous, which began as a 5-cent hot dog stand in 1916, has grown into a beloved American brand known for its annual hot dog-eating contest held every July 4 at its flagship location on the Coney Island Boardwalk.
Smithfield, which has held exclusive rights to produce and sell Nathan's products in the U.S., Canada, and select stores in Mexico since 2014, will acquire all outstanding shares of Nathan's Famous for $102 each. According to WECT, the acquisition is expected to close in the first half of this year.
Nathan's Famous has faced inflationary pressures, with sales costs rising 27% in its most recent quarter. Despite these challenges, Nathan's CEO Eric Gatoff expressed confidence in the acquisition, stating that Smithfield has shown a strong commitment to investing in and growing the brand. Brooklyn Paper reported that the acquisition will allow Smithfield to maximize Nathan's brand growth across retail and foodservice channels.
Smithfield President and CEO Shane Smith described the deal as a "meaningful step" in the company's evolution. The acquisition is expected to achieve annual savings of about $9 million within two years. The famous hot dog-eating contest will continue, with Smithfield ensuring that the tradition remains intact.
Nathan's board of directors, who own or control nearly 30% of the company's shares, have approved the buyout and recommended shareholders vote in favor of the deal. The acquisition marks a new chapter for Nathan's Famous, continuing its legacy as a staple of American culture.
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