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Conagra Brands is Buying Pinnacle Foods for $10.9 Billion

On June 27th, Conagra Brands (NYSE:CAG) announced that its board of directors have unanimously approved a definitive agreement with Pinnacle Foods to acquire all outstanding shares of the latter for $10.9 billion.

The transaction will be paid for in cash and stock and will also include Pinnacle Food’s outstanding debt.

As part of the agreement, 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,” commented Sean Connolly, president and chief executive officer of Conagra Brands.

He added, “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.”

Chief Executive Officer of Pinnacle Foods, Mark Clouse, stated, “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 percent since our 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.”

Pinnacle Foods has net sales annually that are over $3 billion. The company’s portfolio includes the brands Birds Eye, Earth Balance, EVOL, Hungry-Man, and Vlasic.

Conagra Brands (NYSE:CAG) also released their fiscal 2018 fourth quarter financial results posting better than expected results.

CEO Sean Connolly said during the earnings call, “Over the past 3 years, we have made significant progress against our plan to transform ConAgra into a pure-play branded food company and establish a solid platform for future growth. We have built industry leading innovation capabilities, completely overhauled our culture and unlocked significant shareholder value. The impact of these efforts is evident in the tremendous Q4 that we announced today, having delivered 2% organic net sales growth and approximately 16% adjusted operating profit growth. Clearly, our hard work is paying off with improved and more consistent performance. All of these actions have positioned us to take the next step in our evolution.”

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