This comes despite warnings from activist investors including Starboard Value and Barington Capital that a sale would curtail shareholder value.
By midafternoon, shares had tumbled 3.1% to $49.12.
Red Lobster, one of its more mature brands, has been struggling in recent times, undercut by competition from fast-casual restaurants such as Chipotle (CMG). However, though same-restaurant sales have fallen, Red Lobster still accounts for nearly a third of Darden's total annual revenue.
The deal, expected to close in the first quarter of 2015, will generate net proceeds of $1.6 billion, portions of which will be used to pay back debt and for share buyback programs.
TheStreet Ratings team rates DARDEN RESTAURANTS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate DARDEN RESTAURANTS INC (DRI) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its reasonable valuation levels, considering its current price compared to earnings, book value and other measures. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."