Conagra to acquire Pinnacle Foods for $10.9bn

Conagra Brands has announced plans to acquire Pinnacle Foods in a cash-and-stock transaction of $10.9bn.

The transaction will include Pinnacle Foods’ outstanding net debt.

Conagra and Pinnacle Foods’ boards of directors have unanimously approved a definitive agreement, which will see Pinnacle Foods shareholders receive $43.11 per share in cash and 0.6494 shares of Conagra Brands common stock for each share of Pinnacle Foods.

The deal is expected to support Conagra Brands’ capabilities and footprint in frozen food and snack categories.

Conagra Brands president and CEO Sean Connolly said: “The acquisition of Pinnacle Foods is an exciting next step for Conagra Brands. After three years of transformative work to create a pure-play, branded food company, we are well-positioned to accelerate the next wave of change.

“The addition of Pinnacle Foods’ leading brands in the attractive frozen foods and snacks categories will create a tremendous opportunity for us to further leverage our proven innovation approach, brand-building capabilities, and deep customer relationships.

“With greater scale across leading, iconic brands, an unwavering focus on driving profitable growth, and a strong balance sheet and cash flow, we are creating a tremendous platform to drive meaningful shareholder value.”

With annual net sales of more than $3bn, Pinnacle Foods’ frozen and refrigerated products portfolio includes brands such as Birds Eye, Duncan Hines, Earth Balance, EVOL, Erin’s and Gardein.

Pinnacle Foods CEO Mark Clouse said: “Today’s transaction provides Pinnacle Foods shareholders with substantial and immediate value, as well as the opportunity to participate in the significant upside potential of the combined company.

“Because of our employees’ incredible work, Pinnacle’s total shareholder return is approximately 275% since our initial public offering (IPO), and today marks an important milestone in the company’s journey.

“The portfolios and capabilities of both enterprises are impressive and complementary. We look forward to working through a seamless transition with the Conagra Brands team.”

Subject to customary closing conditions and approval of shareholders of Pinnacle Foods and regulatory authorities, the deal is expected to be completed by the end of this year.

The combined company will have a portfolio of brands in categories of frozen and refrigerated meals, snacks, and confectionery.

For this transaction, Goldman Sachs and Centerview Partners are serving as financial advisors to Conagra Brands, while Jones Day is acting as its legal advisor. Credit Suisse and Evercore are acting as financial advisors to Pinnacle Foods with Cravath Swaine & Moore as legal advisor.

Morgan Stanley and Rothschild & Co offered strategic advice to Pinnacle Foods.