ConAgra Foods announces plans to separate into two independent public companies
ConAgra Foods Inc. announced plans to pursue the separation of the company into two independent public companies: one comprising its robust consumer portfolio of diverse and leading brands and the other comprising its market leading foodservice portfolio of innovative 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 spin-off of the Lamb Weston business, tax-free to the Company and its shareholders.
“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,” said Sean Connolly, president and chief executive officer, ConAgra Foods. “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.”
The two businesses operate in distinct markets and possess unique and compelling growth prospects and investment requirements. In addition, ConAgra Foods believes that the separation will result in other material benefits to the standalone companies, including:
- Greater management focus on the distinct businesses of consumer brands and foodservice frozen potato products;
- Increased flexibility, agility and resources to capitalize on their respective long-term opportunities and growth strategies;
- Tailored capital structures and financial policies and targets appropriate for each company’s unique business profile; and
- The ability for investors to value the two companies based on their particular operational and financial characteristics and invest accordingly.
Source: ConAgra Foods