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ConAgra Foods to Spin Off Lamb Weston Business

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ConAgra Foods to Spin Off Lamb Weston Business

ConAgra Foods to Spin Off Lamb Weston Business
November 19
11:45 2015

ConAgra Foods has announced plans to separate the business into two independent public companies – one comprising its consumer portfolio of diverse and leading brands and the other comprising its food service portfolio of innovative frozen potato products. The consumer brands business will be renamed Conagra Brands, and the frozen potato business will operate under the Lamb Weston name. Immediately following the transaction, which is expected to be completed in the autumn of 2016, ConAgra Foods shareholders will own shares of both independent companies. The transaction is expected to be structured as a spin-off of the Lamb Weston business, tax-free to the company and its shareholders.

Sean Connolly, president and chief executive of ConAgra Foods.

Sean Connolly, president and chief executive of ConAgra Foods.

“The decision to separate into two pure-play companies reflects our ongoing commitment to implementing bold changes in order to deliver sustainable growth and enhanced shareholder value,” says Sean Connolly, president and chief executive of ConAgra Foods. “We carefully considered a variety of strategic alternatives, and believe that the separation of our Lamb Weston specialty potato business from our consumer brands business is the best way to drive shareholder value. The separation will enable each company to sharpen its strategic focus and provide flexibility to capitalize on the unique growth opportunities in its respective market. Shareholders will gain direct exposure to more focused consumer and commercial foods businesses, each with distinct customer bases and investment profiles. We are confident that this separation will best position each company to compete and win while creating compelling long-term value for shareholders and delivering benefits to employees, customers and other key stakeholders.”

Conagra Brands will be comprised primarily of the operations currently reported as the company’s Consumer Foods segment, which generated revenue of $7.2 billion in the 2015 financial year. The Consumer Foods segment consists of popular leading brands such as Marie Callender’s, Hunt’s, RO*TEL, Reddi-wip, Slim Jim, PAM, Chef Boyardee, Orville Redenbacher’s, PF Chang’s and Healthy Choice. Conagra Brands will be led by Sean Connolly and will be headquartered in Chicago.

LambWestonDippers black olive powderFollowing the separation, Lamb Weston’s portfolio will consist of frozen potato, sweet potato, appetizer and other vegetable products, as well as a continued presence in retail frozen products under licensed brands and private brands. For 2015, Lamb Weston generated revenues of approximately $2.9 billion and accounted for the significant majority of the Commercial Foods segment’s 2015 operating profit of approximately $570 million.

Lamb Weston is a leading frozen potato products provider to the food service industry on a global basis. The company’s interests in several joint ventures, including Lamb Weston/Meijer in Europe, are integral to the execution of its global strategy and are expected to remain with the business following separation. With distinct competitive advantages in key geographies, Lamb Weston will leverage this strong foundation to build upon its proven track record of growth. Lamb Weston will focus on opportunities to expand share domestically and accelerate international growth, particularly within fast-growing emerging markets.

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