ConAgra Acquires Ralcorp28 November 2012
US - US meat and food procesing giant, ConAgra Foods, has acquired Ralcorp Holdings, the largest manufacturer of private label food in the US for $6.8 billion.
This transaction creates one of the largest packaged food companies in North America, with sales of approximately $18 billion annually and more than 36,000 employees.
It will also position ConAgra Foods as the largest private label packaged food business in North America, with combined private label sales of approximately $4.5 billion.
Gary Rodkin, chief executive officer of ConAgra Foods said: “We are very pleased to have reached an agreement with Ralcorp after a period of collaborative dialogue between the two companies. Ralcorp is already the largest private label food company in the US and is well positioned for future growth.
"The acquisition of Ralcorp is a logical and exciting step for ConAgra Foods. Adding Ralcorp provides us with a much larger presence in the attractive and growing private label segment and accelerates our Recipe for Growth strategy.
"The transaction will allow us to apply our scale and combined operational expertise to this important growth area, and will strengthen our position as one of the leading food companies in North America.
"We believe the balanced combination of our very significant branded food business, the largest private label food business in North America, and our important commercial food businesses, will enable ConAgra Foods to deliver even greater value and innovation to our customers and consumers, and sustainable profitable growth to our shareholders.
"We look forward to working with Ralcorp’s experienced and talented team to capitalize on opportunities and create value for shareholders, and to welcoming Ralcorp’s employees to the ConAgra Foods family.”
Kevin J. Hunt, chief executive officer and president of Ralcorp, said: “We are proud of Ralcorp’s track record of shareholder value creation and view this transaction as the culmination of those efforts.
"This combination delivers immediate and compelling cash value to our shareholders and benefits to our customers and employees. We believe the two companies are a great fit, and our employees will benefit as part of a larger diversified organization with the necessary scale and resources to be a leader in today’s rapidly evolving marketplace.
"On behalf of the Ralcorp Board and management team, we thank our dedicated employees for their continued hard work, which has enabled us to grow Ralcorp to a position of strength with our many private label offerings across both retail and commercial channels.
"We look forward to joining with ConAgra Foods to complete this exciting transaction and capitalize on our future growth opportunities.”
The acquisition of Ralcorp adds to ConAgra Foods’ existing private label business of approximately $950 million to create the largest private label packaged food business in North America, with approximately $4.5 billion in combined annual private label sales.
Ralcorp fits well with ConAgra Foods’ Recipe for Growth strategy, set 18 months ago, which includes expansion in the private label segment, growth in its core business and adjacencies, and expansion internationally.
According to industry analysts, private label now represents 18 per cent of sales in the packaged food market in the US and has consistently demonstrated growth in excess of the overall food market over time.
ConAgra Foods’ combination with Ralcorp creates an enhanced platform that will allow ConAgra Foods to capitalise on, and contribute to, that long-term growth trend while generating significant efficiencies.
TheMeatSite News Desk