just the facts - ConAgra Foods and Ralcorp

By Michelle Russell | 27 November 2012

just-food takes a closer look at ConAgra Foods and Ralcorp

just-food takes a closer look at ConAgra Foods and Ralcorp

ConAgra Foods this morning (27 November) announced it has swooped to buy US own-label group Ralcorp Holdings, a business that rejected a number of takeover bids from the company last year. The deal, when approved, will create the largest own-label firm in North America. Here, just-food takes a closer look at both businesses.

  • In the 12 months to the end of September, Ralcorp recorded earnings of US$73.4m compared to a net loss of $241.2m last year. A year ago, Ralcorp posted a loss amid impairment charges on its former branded cereal business, Post. Ralcorp spun off Post earlier this year. Revenues climbed 14% to $4.32bn.
  • ConAgra booked a drop of 42.1% in full-year and fourth-quarter earnings in June after changes to the way its accounts for its pension costs. In its latest results in September – its first quarter – the group's EPS was up by 177% to US$0.61 and by 42% to $0.44 on a comparable basis. Full-year sales climbed 7.8% to $13.26bn.
  • Ralcorp produces private-brand foods and foodservice products that are sold under individual labels of various retailers, restaurants and other foodservice customers. Its business units include Ralcorp Food Group (pasta, cereals, snacks, sauces, and spreads) and Ralcorp Frozen Bakery Products (frozen griddle and frozen dough products). 
  • ConAgra's business is split into two divisions: Consumer Foods and Commercial Foods. Consumer brands include Egg Beaters, Healthy Choice, Hunt’s, Orville Redenbacher’s, and Pam, as well as own-label, while its commercial food brands include Lamb Weston, Ultragrain, Sustagrain barley and Spicetec Flavors & Seasonings.
  • The transaction creates one of the largest packaged food companies in North America, with sales of around $18bn annually employing around 36,000 staff.
  • The deal will also position ConAgra Foods as the largest private label packaged food business in North America, with combined private label sales of around $4.5bn.
  • ConAgra said it intends to use its "strong" infrastructure and productivity capabilities to drive "significant cost synergies" from the transaction, primarily in the areas of supply chain and procurement efficiencies. It expects to achieve around $225m of cost synergies on an annual basis by the fourth full fiscal year after closing. 

Sectors: Bakery, Cereal, Condiments, dressings & sauces, Frozen, Mergers & acquisitions, Private label, Snacks

Companies: ConAgra Foods, Ralcorp Holdings

View next/previous articles

Currently reading -

just the facts - ConAgra Foods and Ralcorp

There are currently no comments on this article

Be the first to comment on this article

Related research

Global Savory Snacks

Global Savory Snacks industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2007-2011, and forecast to 2016). The profile also contains descriptions of the leading pl...

Global Canned Food

Global Canned Food industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2007-11, and forecast to 2016). The profile also contains descriptions of the leading player...

Savory Snacks in Canada

Savory Snacks in Canada industry profile provides top-line qualitative and quantitative summary information including: market share, market size (value and volume 2007-2011, and forecast to 2016). The profile also contains descriptions of the leading...

Related articles

US: Post Holdings H1 earnings slide

Post Holdings saw its earnings slide in the first half of the year as the US cereal maker reported higher input costs.

US: ConAgra appoints McGough head of consumer foods

ConAgra Foods has appointed Tom McGough to head up its consumer foods business following the resignation of current consumer foods president André Hawaux.

The week ahead - Sainsbury's FY results, Tyson H1, Mondelez Q1

First-quarter results continue to come in next week, with Cadbury owner Mondelez International among the companies reporting numbers to the end of March. Elsewhere, US meat giant Tyson Foods will file half-year figures and UK grocer Sainsbury's will report annual numbers.

Read more on this hot issue

ConAgra eyes US private-label growth with Ralcorp deal

The US food giant's deal to buy Ralcorp Holdings, agreed a year after its approaches were rebuffed, will mean it becomes the country's largest private-label supplier.

Welcome to the home of food information, insight & intelligence

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page