Chicken producer Pilgrim's Pride is offering $5.58 billion to acquire Hillshire, another meat company. The deal would create a "protein-focused" company.

Before the deal can take place, Pilgrim's Pride is requiring Hillshire to drop their plan to buy Pinnacle Foods. Pinnacle Foods makes Hungry Man frozen dinners, Birds Eye frozen vegetables and Duncan Hines cake mixes. Hillshire makes lunchmeats under their own name, Ball Park hot dogs and Jimmy Dean sausages. The company was trying to get into more parts of the grocery store.

Hillshire's deal with Pinnacle was for $4.23 billion. Pilgrim's Pride says their offer of $45 per share is a much better deal that will allow the two companies to cut costs and become more profitable.

Hillshire has been adding higher profit products to its portfolio such as Jimmy Dean's frozen breakfast sandwiches. Pilgrim's Pride currently only offers fresh and frozen chicken.

As news broke of the potential acquisition, shares of Hilshire jumped 21 percent to $44.89 Tuesday morning. 

Pilgrim's Pride is offering $45 per share to acquire Hilshire. That's a 24 percent premium to Friday's closing price of $36.23.

Pilgrim's Pride sent a letter to Hillshire CEO Sean Connolly to tell him that Hillshire shareholders would benefit more from a deal with Pilgrim's Pride than they would with Pinnacle Foods. Some have noted Pinnacle's brands have faced weak growth recently.

According to Forbes:

"We have long respected the Hillshire business and we are confident that Hillshire's Board and shareholders will find our all-cash premium proposal to be superior to the pending acquisition of Pinnacle," Pilgrim's CEO Bill Lovette said in a statement Tuesday morning, calling the deal considerably valuable for both Pilgrim's and Hillshire shareholders. "For Hillshire shareholders, our proposal provides a substantial premium, greater certainty and immediate cash value for their shares. For Pilgrim's, the addition of Hillshire's portfolio of iconic brands and broad based marketing, innovation and distribution expertise will enhance our position as a market leader." 

By combining with Hillshire, Pilgrim's Pride would gain hot dog brands Ball Park and State Fair, dessert brand Sara Lee and Hillshire lunch meats.

The deal could be finalized as early as the third quarter 2014. Pilgrim's Pride also plans to help Hillshire cancel their pending deal with Pinnacle by paying the termination fee of $163 million to Pinnacle.