Conagra to Acquire Pinnacle Foods

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Conagra Brands (NYSE: CAG) announced on June 27 its plans to acquire Pinnacle Foods (NYSE: PF) in a cash and stock transaction worth approximately $10.8 billion. The deal is expected to close by the end of 2018.

Jana Partners didn’t waste time, having announced their 9.1% stake back in April and urging the company to pursue a sale. Whatever else they did behind the scenes it was effective in drawing in bidders.

Pinnacle Foods shareholders will be given 0.6494 shares of Conagra Brands common stock as well as $43.11 per share of Pinnacle Foods common stock that they own. This acquisition is expected to produce annual run-rate cost synergies of $215 million by fiscal 2022. Pinnacle Foods plans to continue to pay its quarterly dividend at the annual rate of $1.30/share until the transaction is finalized. Conagra Brands will maintain its quarterly dividend at the annual rate of $0.85/share through fiscal 2019. This acquisition will enhance Conagra BrandsÕ capabilities in categories such as frozen foods and snacks. Credit Suisse, Morgan Stanley, Evercore, Rothschild & Co, Centerview, and Goldman Sachs acted as financial advisers for this agreement with Alston & Bird and Sullivan & Cromwell serving as legal advisers.

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