US$8.1 billion deal creates frozen food giant
In news from the USA, ConAgra Foods has agreed to buy Pinnacle Foods Inc. for about US$8.1 billion in cash and stock, gaining freezer-aisle brands such as Birds Eye to capitalize on growing demand for frozen foods. The billion dollar acquisition creates a giant powerhouse in the frozen food category.
The purchase will give Chicago-based ConAgra more exposure to one of the few bright spots in supermarkets: Frozen food sales are growing in the USA after years of decline. Even millennials are embracing frozen meals there, which are convenient and less expensive than take-aways and restaurant meals.
More than half of Pinnacle’s revenue comes from frozen brands including Birds Eye, Van de Kamp’s and the Gardein line of vegetarian products.
ConAgra’s quarterly results revealed why the company is doubling down on frozen food with the Pinnacle deal. ConAgra’s refrigerated and frozen segment, with brands like Banquet and Healthy Choice, was the fastest-growing.