ConAgra Foods has completed the sale of its commodity trading and merchandising operations, ConAgra Trade Group.

ConAgra Trade Group was sold to an investor group led by Ospraie Special Opportunities Fund. It will now operate as The Gavilon Group, LLC.

The Gavilon Group will conduct grain and byproducts merchandising and fertilizer distribution, as well as agriculture, energy and other commodity trading activities, and risk management services.

The business was sold for around US$2.8bn, including $2.2bn in cash and $550m of payment-in-kind debt securities of a newly-created holding company of The Gavilon Group. ConAgra Foods also received a warrant exercisable for around 5% of the issued common equity of Gavilon.

"We believe that through the sale of the business we have maximised returns to our shareholders by increasing our focus on core activities," a spokesperson for ConAgra told just-food.

The company declined to comment on what the proceeds from the sale will be used for. ConAgra said it will discuss its capital allocation plans in detail during its fourth-quarter earnings release, due on 26 June. Plans are understood to include further share repurchases and the reduction of interest bearing debt.

Greg Heckman, formerly president of ConAgra Foods' commercial businesses, will become chief executive of The Gavilon Group.

Rob Sharpe has been named president, commercial foods at ConAgra, replacing Heckman. Sharpe will assume responsibility for leading the remaining commercial businesses, operated as the company's food & ingredients reporting segment.

Also today (23 June), ConAgra announced that its board has authorised a $500m increase to the group's existing share buyback programme.