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ConAgra Foods To Acquire Ralcorp, The Largest Private Label Food Manufacturer In The U.S., For $90 Per Share In Cash

The combined company will have significant operating capabilities across its branded, private label and commercial / foodservice businesses, including:

  • A robust Sales and Marketing function that drives top-line growth
  • A strong Research, Quality and Innovation platform
  • A management team with deep industry experience and strong talent across the organization
  • A core understanding of delivering value to the customer and consumer
  • A consumer and shopper insights-driven focus
  • Procurement and risk management expertise
  • Well-developed productivity capabilities and experience with complex supply chains

With Ralcorp, ConAgra Foods will have a balanced portfolio with a stronger growth profile. The transaction is also expected to increase ConAgra Foods’ importance to customers and consumers, with product offerings across a wide range of price points, segments and channels. The enhanced breadth and depth of the combined portfolio is expected to allow ConAgra Foods to build deeper customer relationships and drive additional category growth.

Gary Rodkin, chief executive officer of ConAgra Foods, added, “Clearly, consumer dynamics have changed since the recession and we expect growth in private label food to continue to outpace growth in branded food. At the same time, we remain very proud of and fully committed to our brands, which will remain the largest part of our business and are found in 97% of America’s households. We believe our combination of branded, private label and commercial offerings, supported by leading functional capabilities, represents a unique and balanced approach that allows us to address the full range of customer and consumer requirements and adapt to the changing demands of the food industry.”

Compelling Financial Benefits

ConAgra Foods expects the transaction to provide attractive sales and EPS growth over time. Because this transaction is expected to close by March 31, 2013, management expects it to have a modest benefit on fiscal 2013 financial results and will quantify that benefit in the coming months. Excluding any benefit from this transaction, ConAgra Foods’ expectations for fiscal 2013 fully diluted EPS remain unchanged at $2.03 to $2.06, adjusted for items impacting comparability. ConAgra Foods will provide additional details regarding the favorable impact of this transaction on its financial outlook for fiscal years 2013 and 2014, as well as its favorable impact on the company’s long-term financial algorithm, in due course as integration plans, the pace of expected synergies, and the financing components of the transaction are finalized.

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