ConAgra Foods Inc., announced Wednesday it is planning to split into two independent companies as it continues to intensify its focus on key name brand foods.
One of the companies will house leading brands like Chef Boyardee and Healthy Choice and will be renamed Conagra Brands Inc., while the second company will be named Lamb Weston and will spin off ConAgra's frozen potato products, according to MarketWatch.
The move is expected to be completed by the second half of 2016 and ConAgra shareholders will own stock in both new companies once the transaction is complete.
"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," said ConAgra CEO Sean Connolly, according to the Wall Street Journal. "Shareholders will gain direct exposure to more focused consumer and commercial foods businesses, each with distinct customer bases and investment profiles."
ConAgra has seen other major changes so far this year. The company announced the sale of its private-label operations to TreeHouse Foods Inc., for about $2.7 billion. Additionally, the company intends to cut 1,500 jobs, about 30 percent of its office-based workforce, as it moves its headquarters from Omaha, Neb., to Chicago.
Conagra Brands Inc., with Connolly as CEO, will have a portfolio including Marie Callender's, Hunt's ROTEl, Reddi-wip. Slim Jim, PAM, Chef Boyardee, Orville Redenbacher's, P.F. Chang's, and Healthy Choice brands, reported the Associated Press. The aforementioned operations comprised $7.2 billion of the ConAgra's revenue in fiscal year 2015.
Lamb Weston, whose leadership has yet to be determined, will have a portfolio consisting of frozen potato, sweet potato, appetizers and other vegetable products. In addition, it will also have a continued presence in retail frozen products under both licensed and private brands. The operations that will be taken over by Lamb Weston had generated revenues of approximately $2.9 billion in the 2015 fiscal year, according to ConAgra.
News of the spinoff was received favorably, with the company's shares jumping more than 4 percent in morning trading.
