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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

Stocks in this article: CAGRAH

ConAgra Foods intends to use its strong infrastructure and productivity capabilities to drive significant cost synergies from this transaction, primarily in the areas of supply chain and procurement efficiencies. It expects to achieve approximately $225 million of cost synergies on an annual basis by the fourth full fiscal year after closing.

The acquisition of Ralcorp is expected to be financed primarily with cash on hand, existing credit facilities and new borrowings, for which ConAgra Foods has received a commitment letter from BofA Merrill Lynch.

ConAgra Foods is fully committed to its investment grade credit rating, and consistent with that commitment, expects to issue up to $350 million of equity. ConAgra Foods will prioritize rapid deleveraging in the near term through its strong cash flow generation. The company currently expects to maintain its dividend of $1.00 per share on an annual basis and will significantly reduce its share buyback activities for a period of time. ConAgra Foods remains committed to its long-term capital allocation priorities, including a top-tier dividend, strong balance sheet and strong liquidity.

Integration

ConAgra Foods and Ralcorp will establish a transition team comprised of members of both management teams to prepare for and to oversee the integration of the businesses.

Terms and Conditions

The transaction is subject to the approval of Ralcorp’s shareholders and customary regulatory approvals. The transaction is expected to close by March 31, 2013.

Advisors

Centerview Partners and BofA Merrill Lynch are serving as financial advisors to ConAgra Foods and Davis Polk & Wardwell LLP is serving as its legal advisor. Barclays and Goldman, Sachs & Co. are serving as Ralcorp’s financial advisors and Wachtell, Lipton, Rosen & Katz is serving as its legal advisor.

More information on the transaction can be found at www.conagrafoodstransaction.com.

Conference Call Details

ConAgra Foods will host a conference call at 8:30 am EST/7:30 am CST today to discuss the announcement. Domestic and international participants may access the conference call toll-free by dialing 1-888-312-3047 (US/Canada Toll Free) and 1-719-457-2606 (International Toll) respectively, and using the passcode 1466942. This conference call, along with webcast presentation materials, can also be accessed live on the company’s Investor Relations website at http://investor.conagrafoods.com. To access a replay of the conference call, please dial 1-888-203-1112 (US/Canada Toll Free) or 1-719-457-0820 (International Toll), passcode 1466942.

Ralcorp also issued a separate release today announcing its fourth quarter and full fiscal year 2012 earnings results, which is available on the investor section of the company’s website at www.ralcorp.com.

About ConAgra Foods, Inc.

ConAgra Foods, Inc., (NYSE: CAG) is one of North America's leading food companies, with brands in 97 percent of America's households. Consumers find Banquet®, Chef Boyardee®, Egg Beaters®, Healthy Choice®, Hebrew National®, Hunt's®, Marie Callender's®, Orville Redenbacher's®, PAM®, Peter Pan®, Reddi-wip®, Slim Jim®, Snack Pack® and many other ConAgra Foods brands in grocery, convenience, mass merchandise and club stores. ConAgra Foods also has a strong business-to-business presence, supplying frozen potato and sweet potato products as well as other vegetable, spice and grain products to a variety of well-known restaurants, foodservice operators and commercial customers. For more information, please visit us at http://www.conagrafoods.com.

About Ralcorp Holdings, Inc.

Ralcorp produces a variety of private‐brand foods sold under the individual labels of various grocery, mass merchandise and drugstore retailers, and frozen bakery products sold to in-store bakeries, restaurants and other foodservice customers. Ralcorp’s diversified product mix includes: ready‐to‐eat and hot cereals; nutritional and cereal bars; snack mixes, corn‐based chips and extruded corn snack products; crackers and cookies; snack nuts; chocolate candy; salad dressings; mayonnaise; peanut butter; jams and jellies; syrups; sauces; frozen griddle products including pancakes, waffles, and French toast; frozen biscuits and other frozen pre‐baked products such as breads and muffins; frozen and refrigerated doughs; dry pasta; and frozen pasta meals. For more information about Ralcorp, visit the Company’s website at www.ralcorp.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on ConAgra Foods’ current expectations and are subject to uncertainty and changes in circumstances. These forward-looking statements include, among others, statements regarding expected synergies and benefits of a potential combination of ConAgra Foods and Ralcorp, expectations about future business plans, prospective performance and opportunities, regulatory approvals and the expected timing of the completion of the transaction. These forward-looking statements may be identified by the use of words such as “expect,” “anticipate,” “believe,” “estimate,” “potential,” “should” or similar words. There is no assurance that the potential transaction will be consummated, and there are a number of risks and uncertainties that could cause actual results to differ materially from the forward-looking statements made herein. These risks and uncertainties include the timing to consummate a potential transaction between ConAgra Foods and Ralcorp; the ability and timing to obtain required regulatory approvals and satisfy other closing conditions, including the approval of Ralcorp’s shareholders; ConAgra Foods’ ability to realize the synergies contemplated by a potential transaction; ConAgra Foods’ ability to promptly and effectively integrate the business of Ralcorp and ConAgra Foods; the availability and prices of raw materials, including any negative effects caused by inflation and adverse weather conditions; the effectiveness of its product pricing, including any pricing actions and promotional changes; future economic circumstances; industry conditions; ConAgra Foods’ ability to execute its operating and restructuring plans; the success of ConAgra Foods’ innovation, marketing, including increased marketing investments, and cost-saving initiatives; the competitive environment and related market conditions; operating efficiencies; the ultimate impact of ConAgra Foods’ product recalls; access to capital; ConAgra Foods’ success in effectively and efficiently integrating its acquisitions; actions of governments and regulatory factors affecting ConAgra Foods’ businesses, including the Patient Protection and Affordable Care Act; the amount and timing of repurchases of ConAgra Foods’ common stock, if any; and other risks and uncertainties discussed in ConAgra Foods’ filings with the SEC, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors and security holders are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. ConAgra Foods disclaims any obligation to update or revise statements contained in this press release to reflect future events or circumstances or otherwise.

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