ConAgra Foods today (13 July) took the next step toward plans to spin-off Lamb Weston and form two independent companies with the initial filing of a Form 10 Registration Statement with the US Securities and Exchange Commission.
The separation, expected to be complete by the autumn of this year, will see the creation of a largely branded business, Conagra Brands, and a frozen potato products supplier, Lamb Weston.
ConAgra’s current director Tim McLevish will become the executive chairman of the Lamb Weston board. Tom Werner, currently president of commercial foods at ConAgra, will become CEO of Lamb Weston and serve as a director on the Lamb Weston board.
ConAgra Foods president and CEO Sean Connolly said: “We believe that this separation will create two focused companies that are well-positioned to unlock unique growth opportunities to win in the marketplace and create value for stockholders.”
Connolly said: “We have made tremendous progress since last November when we announced our plan to separate, and the filing of the Form 10 marks an important milestone in this process.”
McLevish said: “I’ve had the opportunity to get to know this business very well, and I believe it has terrific prospects as a stand-alone company. We are extremely well-positioned for long-term growth and shareholder value creation.”
Werner said that as Lamb Weston “prepares for life as an independent company, it is ideally suited to continue to deliver leading products for our customers and value for our shareholders”.
Lamb Weston’s portfolio will consist of frozen potato, sweet potato, appetiser and other vegetable products, as well as a continued presence in retail frozen products under licensed brands and private brands, ConAgra said. “With distinct competitive advantages in key geographies, Lamb Weston will leverage this strong foundation to build upon its proven track record of growth. Lamb Weston will focus on opportunities to expand share domestically and accelerate international growth, particularly within fast-growing emerging markets.”
Conagra Brands will be comprised primarily of the operations currently reported as ConAgra Foods’ consumer foods segment, in addition to the foodservice business – minus the recently-divested Spicetec Flavors & Seasonings and JM Swank businesses – which is currently reported in the commercial foods segment. The consumer foods segment consists of popular leading brands such as Marie Callender’s, Hunt’s, RO*TEL, Reddi-wip, Slim Jim, PAM, Chef Boyardee, Orville Redenbacher’s, P.F. Chang’s and Healthy Choice.
ConAgra said Conagra Brands’ core strategy “will focus on further strengthening its consumer and foodservice portfolios, driving innovation and improving margins”.
According to ConAgra the separation, which is subject to various conditions including obtaining final approval from ConAgra’s board, is expected to be structured as a spin-off of the Lamb Weston business and tax-free to ConAgra and its shareholders.