In a massive acquisition for the food industry, Conagra Brands and Pinnacle Foods announced that their boards of directors have unanimously approved a deal in which Conagra Brands will acquire Pinnacle Foods in a transaction valued at approximately $10.9 billion.
"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. "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."
According to a press release, Pinnacle Foods has annual net sales of over $3 billion, banking off of frozen, refrigerated, and shelf-stable brands including Birds Eye, 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. Based on both companies' latest fiscal year results, net sales of a combined company would amount to approximately $11 billion.
"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. "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."
Execs say the transaction is expected to close by the end of calendar 2018 if all goes according to plan. What impact will this meeting of giants have on the food industry at large? Deli Market News will continue to report.