ConAgra to Spin Off Frozen-Potato Business
November 18 2015 - 8:00AM
Dow Jones News
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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