TreeHouse Foods had purchased ConAgra Foods' private brands operations for $2.7 billion.
"The union of TreeHouse and ConAgra's private brands business establishes an industry leader in customer brands and custom products with significant scale, scope and skill and enables us to extend our reach in the grocery store by over 10 shelf stable and refrigerated food categories,” Sam K. Reed, Chairman and Chief Executive Officer of TreeHouse Foods, said in a press release. “Importantly, the combination will also strengthen our ability to support our customers' efforts to build their corporate brands and offer consumers the best combination of choice and value.”
According to TreeHouse, this purchase makes a meaningful expansion for the brand’s store presence, saying that the combination of this newest operation creates the nation's largest private label food and beverage manufacturer, with annual revenue of nearly $7 billion.
Upon the close of the deal, the company will have more than 50 manufacturing facilities and over 16,000 employees.
"Since our founding ten years ago, our strategy has been to drive shareholder value by consolidating supply of private label brands,” Reed said, adding that TreeHouse offers customers value through economies of scale, quality products and top customer service.
The company added that it expects to incur about $100 million in costs due to transaction fees and issuance costs associated with the acquisition. Both the financing and the acquisition are expected to close in the first quarter of 2016.
