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In a landmark deal announced Wednesday, Smithfield Foods is set to acquire Nathan’s Famous for $450 million in cash, bringing the iconic hot dog brand under the umbrella of one of America’s largest meat processors.
The all-cash transaction values Nathan’s shares at $102 each and represents a significant milestone for the beloved hot dog company that began as a humble five-cent stand on Coney Island more than a century ago.
Smithfield, which has held licensing rights to produce and distribute Nathan’s products throughout the U.S. and Canada since 2014, will now take full ownership of the brand, adding it to a portfolio that includes Gwaltney bacon and Armour frozen meats.
“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,” said Nathan’s CEO Eric Gatoff in a statement.
The acquisition comes at a challenging time for food companies grappling with inflationary pressures. In its most recent quarterly filing with the Securities and Exchange Commission, Nathan’s reported that sales costs for its branded products rose 27% compared to the previous year, including a 20% increase in the average cost per pound of hot dogs.
Nathan’s rich history dates back to 1916, when Polish immigrant Nathan Handwerker established his first hot dog stand on Coney Island with a $300 loan. The business remained in family hands until 1987, when the Handwerkers sold it to investors who continued to expand the franchise beyond its New York origins.
Despite changing ownership, Nathan’s has maintained its flagship location on the same Coney Island lot where Handwerker began his business. This location hosts the company’s internationally recognized hot dog-eating contest every July 4th, which has become an American cultural institution.
The contest, which Nathan’s claims has been held in some form since the stand’s opening (though official records only date back to 1972), attracts approximately 30,000 spectators annually and is broadcast nationally on ESPN. Competitive eating champion Joey Chestnut has dominated the event in recent years, winning 17 of the last 19 competitions and setting a record in 2021 by consuming 76 hot dogs and buns in just 10 minutes. In last year’s contest, Chestnut managed to down 70.5 hot dogs and buns.
In a move likely to reassure fans, Smithfield has confirmed that this iconic contest will continue under their ownership, preserving an important piece of Nathan’s cultural legacy.
From a financial perspective, the acquisition represents a significant premium for Nathan’s shareholders. The company’s board of directors, who collectively control nearly 30% of outstanding shares, have unanimously approved the buyout and recommended shareholders vote in favor of the deal.
Smithfield, which reported an operating profit exceeding $1 billion on sales of $14.1 billion in 2024, expects to achieve approximately $9 million in annual savings within two years of closing the transaction. This efficiency aligns with broader industry trends of consolidation to combat rising costs and streamline operations.
By comparison, Nathan’s reported a profit of $24 million on revenue approaching $150 million in fiscal 2025, highlighting the significant difference in scale between the two companies.
The acquisition is expected to close in the first half of this year, pending regulatory approval and shareholder votes. Smithfield’s shares remained steady following the announcement, trading unchanged at $23.39 in midday trading Wednesday.
This transaction represents another chapter in the ongoing consolidation of the American food industry, as larger manufacturers seek established brands with strong consumer recognition and cultural significance to expand their market presence during challenging economic conditions.
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10 Comments
A $450 million price tag for Nathan’s Famous is quite a premium. This deal highlights the value of established food brands with strong consumer loyalty. Curious to see how the new ownership shapes the brand’s future.
Good point. Iconic regional brands like Nathan’s can be powerful assets if leveraged properly. The challenge will be maintaining authenticity as it expands nationwide.
I’m curious to learn more about Smithfield’s plans for Nathan’s. Will they invest in modernizing the brand and expanding its product line, or focus on protecting the legacy and heritage? Either way, this is a significant deal in the food industry.
As a long-time Coney Island resident, I’m a bit apprehensive about this acquisition. Nathan’s has always been a quintessential local institution. Hopefully Smithfield can preserve the brand’s heritage and character.
As an investor, I’ll be watching this acquisition closely. Nathan’s has strong brand equity, but food companies are facing major headwinds right now. Smithfield will need to execute flawlessly to make this deal pay off.
Absolutely. The current inflationary pressures make this a challenging time for any food business acquisition. Smithfield will have to navigate that carefully.
Interesting to see such an iconic brand like Nathan’s Famous get acquired. I wonder how Smithfield will maintain the brand’s heritage and quality while navigating the current inflationary environment.
Agreed, they’ll need to strike the right balance. Hopefully Smithfield can invest in the brand while keeping the hot dogs as delicious as ever.
From a business perspective, this seems like a savvy move by Smithfield. Nathan’s is a beloved brand with strong growth potential. The key will be whether they can keep the product quality and customer experience consistent as the company scales up.
Agreed. Maintaining quality and authenticity will be critical as they expand the brand’s reach. It will be interesting to see how Smithfield navigates that balance.