ConAgra increases offer for Ralcorp Holdings to $4.9 billion plus assumption of debt
Shares in consumer foods giant ConAgra Foods (NYSE:CAG) moved higher today despite confirmation that it had offered to acquire its smaller peer Ralcorp Holdings (NYSE:RAH) for $4.9 billion plus the assumption of $2.5 billion in debt.
The $86 per share cash offer would solidify ConAgra Foods as one of the largest packaged food companies in the United States, behind General Mills (NYSE:GIS), Kraft (NYSE:KFT).
ConAgra initially offered $82 per share in cash and stock for Ralcorp on March 21st, which was rebuffed.
Ralcorp is best known for the Post cereal brand, but also owns a number of private label products in cereal, pasta, crackers, jams, syrups and frozen waffles.
"We believe this all-cash proposal is highly attractive to Ralcorp's shareholders and a transformational growth opportunity for both companies," said Gary Rodkin, CEO of ConAgra Foods.
"Ralcorp has made significant progress with its businesses, and we are excited about the prospect of building on its number one position in private label and enhancing its iconic brands, like Post, in very important categories."
ConAgra believes the combined company would generate $250 million in annual cost savings and would benefit from higher operating margins, earnings per share growth and higher sales.
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