ConAgra Foods Inc., which has responded to mounting challenges in the food sector with aggressive restructuring this year, unveiled Wednesday plans to split into two independent public companies.

One of the companies is slated to house the consumer-brands business and will be renamed Conagra Brands Inc., while the second company will be named Lamb Weston and will spinoff ConAgra's frozen-potato products.

The moves, which will be structured as a spinoff of the Lamb Weston business, are expected to be completed by the latter half of 2016, the company said in a news release. Once the transaction is done, shareholders of ConAgra will own stock in both new companies.

"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," said Sean Connolly, CEO of ConAgra. "Shareholders will gain direct exposure to more focused consumer and commercial-foods businesses, each with distinct customer bases and investment profiles."

Conagra Brands will be made up mostly of the company's current consumer-foods segment, which generated about $7.2 billion in fiscal 2015 revenues, ConAgra said. The business includes brands Marie Callender's, Hunt's, RO*TEL, Reddi-wip, Slim Jim, PAM, Chef Boyardee, Orville Redenbacher's, P.F. Chang's and Healthy Choice.

The new company is also slated to include businesses reported in the commercial-foods segment, which generated about $1.8 billion in revenue.

Lamb Weston 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. In 2015, those businesses raised about $2.9 billion in revenue.

ConAgra is among an array of big U.S. food companies grappling with slowing growth as many consumers eschew traditional packaged foods for less-processed and fresher fare.

Write to Ezequiel Minaya at ezequiel.minaya@wsj.com

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(END) Dow Jones Newswires

November 18, 2015 07:45 ET (12:45 GMT)

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