ConAgra Food Inc. (NYSE: CAG) announced plans to split itself into two publicly traded companies on Wednesday, as the food company continues to transform itself.
One of the companies will be renamed Conagra Brands and contains consumer brands like Chef Boyardee, Slim Jim and Orville Redenbacher popcorn. Its frozen potato business will be spun off as a separate company and go by the name Lamb Weston.
The move is expected to be completed in the fall of 2016, whereupon shareholders will own shares of both independent companies. The transaction will be structured as a spin-off and is expected to be tax-free.
After the separation, Conagra Brands will work to improve operational efficiency and expand margins while returning cash to shareholders. The company said it’s committed to maintaining an investment-grade profile and paying a "strong and attractive" dividend.
ConAgra’s share price jumped more than 3 percent in morning trading. The company’s share has gained more than 8% this year.
There have been some big changes at ConAgra this year. The company announced the sale of most of its private-label operations to TreeHouse Foods Inc. for about $2.7 billion. It also plans to cut 1,500 jobs, about 30 percent of its office-based workforce, as it moves its headquarters from Omaha, Nebraska, to Chicago.