Business Strategies / Capital Spending / Industry News

TreeHouse Foods In Talks to Buy ConAgra's Ralcorp

By Lauren R. Hartman, Product Development Editor

Oct 23, 2015

TreeHouse Foods is rumored to be in advanced talks to purchase the Ralcorp business from ConAgra Foods in a deal valued at $2.5- to $2.7 billion, according to a report from Reuters. After examining other options, such as selling Ralcorp to a private equity firm or breaking it up, ConAgra is now engaged in negotiations with TreeHouse in order to finalize a deal, people familiar with the matter said this week, according to the report. If a deal cannot be met, ConAgra may try again to sell Ralcorp to a buyout firm, the people said.

The Ralcorp business that makes spreads, nuts and pretzels, would complement TreeHouse's existing condiment and healthy snacks business, but it's not certain an agreement with TreeHouse will be reached, the people added.

Ralcorp sold to ConAgra for $5.1 billion two years ago. The business, which also includes cereal, pasta, crackers, jams and jellies, syrups and frozen waffles, has since been plagued by integration costs and pressured profit margins. ConAgra has reportedly said it was hoping to finalize a sale of the private brands business this fall.

Since Sean Connolly joined ConAgra as chief executive in April 2015, the former CEO of the Hillshire Brands Company has sought to revive the business. In his first earnings call in June, he announced intentions to exit the private label business.