ConAgra Foods, Inc. announced the completion of the sale of its private label operations to TreeHouse Foods for USD2.7 billion in cash, excluding transaction-related expenses and subject to post-closing adjustments.
“The sale of the private label business to TreeHouse Foods is another important step for ConAgra Foods as we continue to transform the company to drive sustainable growth, more consistent performance and deliver enhanced shareholder value,” said Sean Connolly, president and chief executive officer of ConAgra Foods. “We are confident the private label business will be well-positioned as part of TreeHouse Foods and our companies are working closely together to ensure a smooth transition for all stakeholders.”
The agreement states that approximately 9500 employees will be transferred to TreeHouse Foods, together with most of the private label operations belonging to ConAgra Foods, including 32 manufacturing facilities in the U.S, Canada and Italy.
Certain private label operations with a strong connection to ConAgra Foods’ existing Consumer Foods business were not part of the sale, specifically canned pasta, cooking spray, peanut butter, pudding/gels, Gelit frozen pasta product offerings, as well as the HK Anderson and Kangaroo brand equities, trademarks and business portfolios. Results for these operations, which were not material, were moved to the Consumer Foods reporting segment in the first quarter of fiscal 2016.
The company expects the transaction to result in a tax asset of approximately USD1.6 billion, which can be used to offset potential future capital gains over the next five years.