Smithfield Foods announced on Wednesday it will purchase Nathan’s Famous, the historic Coney Island hot dog company that began as a five-cent stand in 1916, in a fully cash-based acquisition valued at $450 million. Under the terms, Smithfield, which has been authorized to manufacture and sell Nathan’s branded items in the U.S. and Canada as well as at Sam’s Clubs located in Mexico since 2014, is acquiring all outstanding shares of Nathan’s at a price of $102 per share.
Like many companies in the food industry, Nathan’s Famous has been grappling with substantial inflationary pressures. In its most recent quarterly filing with the U.S. Securities and Exchange Commission, Nathan’s disclosed that expenses related to branded products increased by 27% compared with the prior year. The company also reported that the average cost per pound of hot dogs went up by 20%.
The origins of Nathan’s Famous trace back to Nathan Handwerker, who established the first hot dog stand in Coney Island in 1916 with a modest $300 loan, company records indicate. Over subsequent decades, the Handwerker family expanded operations by opening several additional outlets throughout the New York region before eventually divesting the Nathan’s business to investment stakeholders in 1987. Since then, the franchise has continued its geographic and commercial growth.
Nathan’s maintains a distinctive cultural status in the United States, partly due to its long history and notably through its annual hot dog eating contest conducted at the flagship Coney Island location. Every Fourth of July, competitive eaters gather from across the globe to attempt to consume the greatest number of hot dogs within a 10-minute timeframe. The event is held on the same site where the brand’s original stand was founded by Handwerker.
American Joey Chestnut currently holds the title of Nathan’s hot dog eating champion, having consumed 70.5 hot dogs and buns in last year’s competition. Chestnut boasts an impressive record, having won 17 of the previous 19 contests and setting a standing record in 2021 after eating 76 hot dogs and buns. Although the first officially recorded contest took place in 1972, Nathan’s reports that informal eating challenges began the year the original stand opened in the early 20th century. The 2025 contest marked the 103rd iteration of the event.
Smithfield assured that the hot dog eating contest, which typically attracts an estimated 30,000 spectators at Coney Island and has been broadcast on ESPN, will continue following the acquisition. The company expects to realize approximately $9 million in annual cost savings within two years after closing the transaction.
Eric Gatoff, Nathan’s CEO, remarked on Smithfield’s commitment, stating, "As a long-time partner, Smithfield has demonstrated an outstanding commitment to investing in and growing our brand while maintaining the utmost quality and customer service standards." Nathan’s board of directors, which controls about 30% of the company’s outstanding common stock, has endorsed the buyout and recommended shareholders approve the transaction.
Smithfield, whose portfolio includes the Gwaltney bacon and Armour frozen meat brands, reported operating profits exceeding $1 billion in 2024 on revenues of $14.1 billion. The company’s shares were stable in midday trading, valued at $23.39 per share on Wednesday.
For the fiscal year 2025, Nathan’s reported net income of $24 million on revenues nearing $150 million. The acquisition deal is anticipated to finalize within the first half of the year.