ConAgra to separate into 2 independent public companies
ConAgra Foods, Inc., Omaha, Neb., announced plans to pursue the separation of the company into two independent public companies—one comprising its robust consumer portfolio of Marie Callender’s, Hunt’s, RO*TEL, Reddi-wip, Slim Jim, PAM, Chef Boyardee, Orville Redenbacher’s, P.F. Chang’s and Healthy Choice brands and the other comprising its foodservice portfolio of frozen potato products. The consumer brands business will be renamed Conagra Brands, Inc. and the frozen potato business will operate under the Lamb Weston name. Immediately following the transaction, which is expected to be completed in the fall of 2016, ConAgra Foods shareholders will own shares of both independent companies. The transaction is expected to be structured as a spinoff of the Lamb Weston business.
“The decision to separate into two pure-play companies reflects our ongoing commitment to implementing bold changes in order to deliver sustainable growth and enhanced shareholder value,” says Sean Connolly, president and CEO. “We carefully considered a variety of strategic alternatives, and believe that the separation of our Lamb Weston specialty potato business from our consumer brands business is the best way to drive shareholder value. The separation will enable each company to sharpen its strategic focus and provide flexibility to capitalize on the unique growth opportunities in its respective market. Shareholders will gain direct exposure to more focused consumer and commercial foods businesses, each with distinct customer bases and investment profiles. We are confident that this separation will best position each company to compete and win while creating compelling long-term value for shareholders and delivering benefits to employees, customers and other key stakeholders.”
Conagra Brands is also expected to include several businesses currently reported within the commercial foods segment, including the traditional foodservice business (sales of branded products to foodservice companies), Spicetec Flavors & Seasonings and JM Swank, as well as certain private label operations, which were moved to the consumer foods reporting segment in the first quarter of fiscal 2016. Conagra Brands is also expected to retain the company’s stake in the Ardent Mills joint venture.
Conagra Brands will be led by Connolly and will be headquartered in Chicago.
Following the separation, Lamb Weston’s portfolio will consist of frozen potato, sweet potato, appetizer and other vegetable products, as well as a continued presence in retail frozen products under licensed brands and private brands. For fiscal 2015, Lamb Weston generated revenues of approximately $2.9 billion, as reported.