X
    Categories: Food and beverages

Conagra Brands invests $10.9B including debt, to buy Pinnacle Foods

Conagra Brands, the F&B major, has recently announced its plan to acquire Pinnacle Foods for $8.1 billion. Including the debts, the deal would reportedly be valued at $10.9 billion. The acquisition is a part of the transformation of Conagra under CEO Sean Connolly who aims to maximize the company turnover through millennial eating trends that is moving towards frozen food consumption. According to analysts, the combination of Conagra and Pinnacle will create a frozen food company in U.S. that will be second only to Nestle. As the youth rediscovers the benefits of healthy eating, Conagra plans on investing in the frozen food business in order to cater to young diners. The announcement of the deal comes on the heels of activist investor Jana Partners disclosing a 9% stake in Pinnacle and declaring its plan to talk with Pinnacle for a possible sale. Jana Partners is noted for its pairing abilities and has previously pushed for changes in Conagra. The deal comes at a time when the market is ripe for frozen foods. According to reliable research reports the frozen foods market revenue has gone from $50 billion in 2012 to approximately $54 billion in 2017. While younger shoppers prefer French toast, waffles, pancakes, breaded chicken and other poultry products in the frozen category, ice-cream has been found to be favorite frozen food for the older generations. Frozen entrees have been found to be good sellers among all generations. U.S. households with incomes over $100,000 have been found to be more likely to buy frozen food. Frozen food brands from Conagra like Healthy Choice dinners and Alexia fries and sides and Pinnacle’s frozen food options like Mrs. Pauls fish, Hungry Man meals, Birds Eye vegetables and Udis Gluten Free breads would offer consumers a lot to choose from, apparently. The deal requires the approval of Pinnacle shareholders before it can meet its targeted closure at the end of 2018.
Paroma Bhattacharya:

Paroma currently works as a content developer for CMFE Research and a couple of other platforms. Fortified with a post-graduation degree in Journalism and Mass Communication, she delved head long into a writing career, creating resourceful and information enriched content in diverse fields. Apart from being a compulsive reader she also loves to cook, paint and travel. UPDATE: Paroma Bhattacharya no longer writes for CMFE Research. Should you have any query related to the content or wish to get in touch with us, please reach out to ‘Pankaj Singh’. or Email - pankaj.s@cmferesearch.com

Read More...