Historic Coney Island Hot Dog Maker Nathan's Famous Acquired by Smithfield Foods in Major $450 Million Deal
The iconic American fast-food brand Nathan's Famous, which began over a century ago as a humble five-cent hot dog stand on Coney Island, has been sold to the packaged meat giant Smithfield Foods in a substantial $450 million all-cash transaction. The companies jointly announced the agreement on Wednesday, marking a significant shift in ownership for the beloved hot dog purveyor.
Details of the Acquisition and Financial Implications
Under the terms of the deal, Smithfield Foods will acquire all of Nathan's outstanding shares for $102 per share, with the transaction anticipated to finalise in the first half of 2026. Smithfield, which has held the rights to produce and distribute Nathan's products across the United States, Canada, and Sam's Clubs in Mexico since 2014, saw its shares surge nearly 9% higher in midday trading following the announcement, reaching $100.81 per share.
Nathan's CEO, Eric Gatoff, expressed confidence in the acquisition, 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." The Nathan's board of directors, who own or control approximately 30% of the company's common stock, have approved the buyout and will recommend that shareholders vote in favour of the deal.
Strategic Benefits and Company Performance
Smithfield Foods anticipates achieving annual savings of around $9 million within two years of closing the acquisition, highlighting the strategic financial benefits of the merger. The company, which also owns well-known brands such as Gwaltney bacon and Armour frozen meats, reported robust financials in 2024, with operating profits exceeding $1 billion on sales of $14.1 billion. Smithfield is on track to surpass these figures when it releases its fourth-quarter results.
In contrast, Nathan's Famous reported a profit of $24 million on revenue nearing $150 million for fiscal year 2025, underscoring its steady performance in the competitive fast-food market. Meanwhile, Smithfield's shares remained stable at $23.39 in midday trading on Wednesday, reflecting investor confidence in the acquisition's long-term prospects.
This acquisition represents a pivotal moment for both companies, blending Nathan's rich heritage with Smithfield's extensive production and distribution capabilities to potentially expand the brand's reach and market presence in the years ahead.
