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ConAgra Brands to Acquire Pinnacle Foods

07/02/2018

The rumored acquisition of Pinnacle Foods by ConAgra Brands has been finalized. The transaction will comprise $10.9 billion with $8.2 billion represented by stock at $68 per share. Since Pinnacle shares were up 23 percent since Jana Partners filed a report that it had acquired 9 percent of the stock of Pinnacle Foods, the apparent premium paid by ConAgra Brands was priced in.

Previously Jana was instrumental in motivating a restructuring of ConAgra which has shown a remarkable increase in comparable sales from a decline of 6 percent in FY 2017 to a rise of 1.4 percent in FY 2018. The Company generated a fourth quarter differential of 10.6 percent in sales value between 2017 and the corresponding quarter in 2018.

The acquisition of Pinnacle is anticipated to generate synergies amounting to $215 million by 2022 associated with economies of scale and marketing strength mainly in refrigerated foods. The product lines of Pinnacle Foods and ConAgra Brands are complementary and the combined enterprise will be second only to Nestlé in frozen food sales.