ConAgra Foods has agreed to sell its Gilroy Foods & Flavors business-to-business unit to commodities giant Olam International for US$250m.
The US food giant plans to offload Gilroy Foods & Flavors’ dehydrated garlic, onion, capsicum businesses, as well as its Controlled Moisture, GardenFrost, Redi-Made and fresh vegetable operations.
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The units, part of ConAgra’s commercial foods business, generated around US$300m of sales in fiscal 2010.
“This announcement is part of ConAgra Foods’ ongoing strategy of divesting non-core operations to continuously improve our focus,” said CEO Gary Rodkin. “As our past portfolio changes have demonstrated, transactions like these, along with our capital allocation discipline, have allowed us to concentrate our resources behind the highest opportunity areas of our company.”
Olam will take on three manufacturing facilities in California and one each in Nevada, New Mexico and Oregon. A warehouse in King City, California is also included in the sale.
The deal does not include three facilities in Illinois, New Jersey and Utah, which produce seasoning blends and flavors. ConAgra will maintain full ownership of these plants and continue operations as usual.
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