ConAgra Foods, Inc., Omaha, Neb., reached a definitive agreement to sell its private label operations to TreeHouse Foods, Oak Brook, Ill., for approximately $2.7 billion in cash, excluding transaction-related expenses.

“The sale of our private label business marks another important milestone, as we re-make ConAgra Foods into a focused, higher-margin, more contemporary and higher-performing company,” says Sean Connolly, president and CEO, ConAgra Foods. “This transaction will enable ConAgra to sharpen our focus and resources on our consumer foods and commercial foods segments, as we continue to move quickly to drive sustainable growth and deliver enhanced shareholder value.”

“Today’s announcement follows a robust sale process involving more than 35 potential buyers, including both strategic buyers and financial sponsors,” Connolly adds. “We are confident that the private label business will be in good hands with TreeHouse Foods, and better-positioned to reach its full potential as part of a focused private label company.”

Under the terms of the agreement, ConAgra Foods will divest the vast majority of its private label operations, which are classified as discontinued operations. Among other assets, this includes a network of 32 manufacturing facilities in the United States, Canada and Italy. ConAgra Foods will retain certain private label operations with a strong connection to its existing consumer foods business, specifically canned pasta, cooking spray, peanut butter, pudding/gels, Gelit frozen pasta and the HK Anderson and Kangaroo brand equity, trademark and business portfolios; the results for these operations, which were not material, were moved to the consumer foods reporting segment in the first quarter of fiscal 2016.

The transaction is subject to customary closing conditions and regulatory clearances, and is expected to close in the first quarter of calendar year 2016.