In a significant development within the packaged-food industry on Wednesday, Smithfield Foods, Inc. (NASDAQ:SFD) announced its plans to acquire Nathan’s Famous, Inc. (NASDAQ:NATH) for an all-cash transaction valued at roughly $450 million. This agreement, approved unanimously by Nathan’s board and contingent upon customary shareholder and regulatory approvals, will provide Smithfield with permanent control over the iconic Nathan’s Famous brand, eliminating the expiration risk posed by the existing licensing arrangement.
The purchase price represents a premium offer of $102 per share for Nathan’s Famous, with Smithfield targeting to finalize the deal within the first half of 2026. This strategy appears aligned with ongoing consolidation trends in the packaged foods sector, as Smithfield aims to solidify its hold on one of America’s most recognizable culinary brands.
Since 2014, Smithfield Foods has maintained exclusive rights to manufacture and distribute Nathan’s Famous products across U.S. retail and foodservice channels, extending into select Canadian and Mexican markets. Notably, this licensing agreement was set to expire in 2032, a timeline now rendered moot by the proposed acquisition that confers indefinite ownership to Smithfield.
Strategic Perspective and Growth Outlook
Smithfield Foods President and CEO Shane Smith outlined the transaction as a strategic advancement designed to enhance the company’s prominence in the packaged meats category. He asserted that owning Nathan’s Famous outright would allow Smithfield to build upon the strengths of its existing portfolio and unlock further growth opportunities within its largest business segment.
Since the inception of the licensing deal nearly a decade ago, Smithfield has invested significantly in expanding the brand’s reach and product line. According to Smith, Smithfield’s capabilities in large-scale manufacturing, innovative marketing, product development, and expertise in both retail and foodservice channels position the company to elevate Nathan’s Famous to higher levels of market penetration and consumer engagement.
Financial Implications and Integration Benefits
The acquisition is expected to provide immediate accretion to adjusted diluted earnings per share from continuing operations, reflecting the transaction’s favorable financial dynamics. Moreover, Smithfield forecasts that by the second year post-closing, the company will realize approximately $9 million in annual cost savings, achieved through operational efficiencies and enhanced integration between sales channels.
Eric Gatoff, Chief Executive Officer of Nathan’s Famous, characterized the arrangement as a natural progression that delivers considerable valuation benefits for shareholders. Gatoff emphasized Smithfield’s longstanding commitment to upholding Nathan’s Famous’ brand quality and customer service standards, as well as investing in the brand’s sustained growth.
The merger has secured backing from Nathan’s board and shareholders controlling about 29.9% of outstanding shares have already agreed to support the transaction. The deal will be financed through Smithfield’s existing liquidity reserves, which stood at $3.069 billion as of September 28, 2025, including $773 million in cash and cash equivalents and $2.297 billion in available credit facility capacity.
Market Reaction and Conditions
Following the announcement, Smithfield Foods shares traded marginally lower by 0.02% at $23.36 as of the publication time, according to market data. In contrast, Nathan’s Famous stock surged by 8.70%, reflecting investor enthusiasm about the acquisition.
The transaction remains subject to regulatory scrutiny, including antitrust reviews and approval from the Committee on Foreign Investment in the United States (CFIUS), as well as routine closing conditions.
Conclusion
Smithfield Foods’ announcement of acquiring Nathan’s Famous represents a strategic move to consolidate ownership of a well-established brand, enhance its packaged meats portfolio, and leverage operational synergies to drive growth. The company anticipates that this acquisition will create shareholder value through immediate earnings benefits and sustained long-term brand development.