Pilgrim’s Pride, the US chicken processor, is to purchase UK pork producer Tulip from Danish Crown in a £290m deal.

The transaction includes Tulip’s 12 fresh and value-added operations in the UK. It is to be funded with cash and the purchase price represents a price of 5.4 times earnings.

The move is said to strengthen Pilgrim’s European business. Jayson Penn, Pilgrim’s chief executive officer said the deal allows it expand its geographical footprint, enhance value-added portfolio and reduce volatility.

Tulip has an integrated production model along with well-invested assets and established customer relationships. It will allow Pilgrim’s grow in the UK market.

Pilgrim’s already has a strong position within the UK chicken market. This allows it to strengthen its position in pork

Tulip is the largest pig producer in the UK, with nearly £1bn in annual sales and employs more than 6,000 people.

Pilgrim’s already has a strong position within the UK chicken market. This allows it to strengthen its position in pork.

Under terms of the agreement, Danish Crown will continue to supply Danish pork to Tulip under a long-term supply agreement.

Pilgrim’s bought poultry company, Moy Park from Brazil’s JBS in a deal valued at around $1bn in 2017. Pilgrim’s Pride is a subsidiary of Brazilian meat giant, JBS.

Danish Crown had blamed Tulip for dragging performance last year. It has recently invested £10m at its Cornwall site.

Danish Crown said it would take a €67m hit on selling Tulip as it is carrying the business at a higher level.