ConAgra Foods Inc. is selling most of its private-label operations to TreeHouse Foods Inc. for about $2.7 billion, as part its plan to focus more on name brands including Chef Boyardee and Slim Jim.
Omaha-based ConAgra initially announced plans to sell the unit in June, and the deal is expected to close in the first quarter. It will keep some minor private-label operations including its canned pasta, cooking spray, and peanut butter and pudding offerings along with several branded products that were bundled into the unit.
Oak Brook, Illinois-based TreeHouse Foods, which already focuses on store-brand food products, said it expects the newly acquired operations to boost its annual sales to nearly $7 billion.
It will also boost the company’s employee base to more than 16,000 people and give it a total of more than 50 manufacturing facilities.
The deal comes one month after ConAgra said it will cut 1,500 jobs, or about 30 percent of its office-based workforce, and move its headquarters to Chicago from Omaha, Nebraska. The restructuring moves are part of the company’s plan to make itself leaner and develop products to meet changing consumer tastes as people seem to seek out less processed and healthier foods.
ConAgra had been facing pressure from major stockholder Jana Partners, which said ConAgra’s results have been disappointing since it bought store-brand business Ralcorp for $5 billion two years ago.
ConAgra, which also makes Hebrew National hot dogs, Jiffy Pop, and Bertolli products, reported a first-quarter loss of $1.2 billion.
Overall, it expects about $345 million in one-time charges over the next two to three years related to the restructuring.
In trading Monday, shares of ConAgra rose 36 cents, or 0.9 percent, to $40.91 in the regular trading session, then rose another 15 cents to $41.06 in aftermarket trading.
Treehouse Foods Inc. shares dropped $4.80, or 5.6 percent, to $80.84.