Conagra Brands has entered a deal with Pinnacle Foods to purchase it for $10.9 billion in cash and stock, according to a company statement.
Pinnacle Foods shareholders will receive $43.11 per share in cash and 0.6494 shares of Conagra Brands common stock for each share of Pinnacle Foods held.
“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,” said Sean Connolly, president and chief executive officer of Conagra Brands.
Healthy-Choice owner Conagra Brands and owner of Bird’s Eye, Pinnacle Foods, have reportedly danced around a partnership idea for years. The partnership comes months after activist investor Jana Partners took a 9 percent stake in Pinnacle and planned to talk with the company about a possible sale.
Enhancing Conagra Brands snacks and frozen food presence
With the ever growing healthy-for-you snacks and the ready-to-eat food trend, this acquisition will help Conagra Brands increase their presence in snacks and frozen food. The company will gain popular Pinnacle Foods brands such as Duncan Hines, Earth Balance, EVOL, Erin’s, Gardein, Glutino, Hawaiian Kettle Style Potato Chips, Hungry-Man, Log Cabin, Tim’s Cascade Snacks, Udi’s, Vlasic and Wish-Bone, among others.
“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,” Connolly said.
According to a company statement, the two organizations share complementary portfolios, supply chains and results-oriented cultures, which are expected to facilitate integration.
“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,” said Pinnacle Foods chief executive officer Mark Clouse.
The companies’ merge is one of the first major transactions since Campbell Soup acquired Snyder’s Lance in December. The merge would also create the second-largest U.S. frozen food company behind Nestle, analysts at RBC Capital Markets have written.