WASHINGTON (dpa-AFX) - Packaged foods company ConAgra Foods, Inc. (CAG) said it plans to pursue the separation of the company into two independent public companies: one comprising its consumer portfolio of diverse brands and the other comprising its 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, in a tax-free distribution of new publicly traded stock in Lamb Weston to the company and its shareholders.
Conagra Brands will be comprised primarily of the operations currently reported as the company's Consumer Foods segment, which generated about $7.2 billion in fiscal 2015 revenues, as reported.
The Consumer Foods segment consists of popular brands such as Marie Callender's, Hunt's, RO*TEL, Reddi-wip, Slim Jim, PAM, Chef Boyardee, Orville Redenbacher's, P.F. Chang's and Healthy Choice.
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 about $2.9 billion, as reported, and accounted for the significant majority of the Commercial Foods segment's fiscal 2015 operating profit of about $570 million.
ConAgra Foods also reiterated its plans to utilize the net proceeds from the pending sale of its Private Brands business primarily for debt reduction.
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