Smithfield Foods has acquired Nathan's Famous in an all-cash transaction valued at $450 million. The agreement entails Smithfield purchasing all outstanding shares of Nathan's for $102 per share. Smithfield Foods has held the rights to produce and sell Nathan's products in the U.S., Canada, and Mexico since 2014. The acquisition is expected to conclude in the first half of the current year.
Acquisition Details
The transaction formalizes Smithfield's acquisition of the iconic hot dog brand. Smithfield Foods will purchase all outstanding shares of Nathan's Famous for $102 per share. Nathan's board of directors, which controls nearly 30% of the company's common stock, has approved the buyout and recommended shareholder approval.
Financial Context and Outlook
Nathan's Famous had been operating under inflationary pressure. In its most recent quarter, the company reported a 27% increase in sales costs for branded products compared to the prior year, with the average cost per pound of hot dogs increasing by 20%. For fiscal year 2025, Nathan's reported a profit of $24 million on revenues approaching $150 million.
Smithfield Foods, which also owns brands such as Gwaltney and Armour, reported over $1 billion in operating profit in 2024 from sales of $14.1 billion. Smithfield expects to achieve approximately $9 million in annual savings within two years of the deal's closing. Nathan's CEO Eric Gatoff stated that Smithfield has demonstrated a commitment to investing in and growing the brand while maintaining quality and customer service standards.
Company History and Cultural Presence
Nathan Handwerker established the first Nathan's hot dog stand in Coney Island in 1916. The Handwerker family sold the business to investors in 1987, after which the franchise continued its expansion. Nathan's maintains a cultural presence, partly due to its historical roots and the annual hot dog-eating contest.
Annual Hot Dog Eating Contest to Continue
Smithfield Foods announced that the annual hot dog-eating contest, held at its Coney Island flagship location, will continue. The event takes place each July 4, is televised, and draws an estimated crowd of 30,000 spectators. The contest's informal origins date back to the early 20th century, with the company stating the 2025 contest marks its 103rd. American Joey Chestnut is the current champion, having won 17 of the last 19 events, and holds the record of consuming 76 hot dogs and buns set in 2021. Last year, he consumed 70.5 hot dogs and buns.