ConAgra to Separate Into Two Pure-Play Companies

OMAHA, Neb. — ConAgra Foods Inc. plans to separate into two independent public companies: its consumer brands business, to be renamed Conagra Brands Inc., and its frozen potato business, which will operate under the Lamb Weston name. The separation is expected to be completed in fall 2016.

Following the transaction, ConAgra shareholders will own shares of both companies. It is expected to be structured as a spinoff of the Lamb Weston business, tax-free to ConAgra and its shareholders.

"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," stated ConAgra Foods President and CEO Sean Connolly. "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," Connolly continued. "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."

The two businesses operate in distinct markets and possess unique and compelling growth prospects and investment requirements, according to ConAgra.

The company believes that material benefits to the standalone companies resulting from the separation will include:

• Greater management focus on the distinct businesses of consumer brands and foodservice frozen potato products;
• Increased flexibility, agility and resources to capitalize on their respective long-term opportunities and growth strategies;
• Tailored capital structures and financial policies and targets appropriate for each company's unique business profile; and
• The ability for investors to value the two companies based on their particular operational and financial characteristics and invest accordingly.

Post-separation, Conagra Brands will include leading brands such as Marie Callender's, Hunt's, RO*TEL, Reddi-wip, Slim Jim, PAM, Chef Boyardee, Orville Redenbacher's, P.F. Chang's and Healthy Choice. It is also expected to include several businesses currently reported within the commercial foods segment, including the traditional foodservice business (sales of branded products to foodservice companies), Spicetec Flavors & Seasonings and JM Swank, along with certain private label operations that were moved to the consumer foods reporting segment during the first quarter of fiscal 2016. Conagra Brands is also expected to retain the company's stake in the Ardent Mills joint venture.

Conagra Brands' core strategy will focus on further strengthening its consumer and foodservice portfolios, driving innovation and improving margins, and it will remain committed to its plans to optimize operational efficiency to provide additional resources to invest in the business and pursue strategic acquisitions while also returning capital to shareholders, the company said. Connolly will lead Conagra Brands, which will be headquartered in Chicago.

Lamb Weston's portfolio will include 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. It will focus on opportunities to expand share domestically and accelerate international growth, particularly within fast-growing emerging markets.