US meat processor ConAgra Foods is to sell off its meatpacking business as part of its plan to revitalise ConAgra by shifting its focus to big brands and value-added goods.
A deal to sell 54% of the meatpacking business to Hicks, Muse, Tate and Furst and Booth Creek Management was delayed when ConAgra Beef had to recall nearly 19m pounds of ground beef after an E.coli contamination at one of its plants.
The purchase price of US$800m will help ConAgra to settle some of its debt, before the rest of the meatpacking business is eventually sold.
Analysts are now speculating that ConAgra will sell off its other low-profit businesses such as its fertiliser, crop chemical and feed ingredient businesses.
ConAgra, whose brands include Act II Popcorn, Butterball turkeys, Chef Boyardee, Chun King and Healthy Choice, has undergone major restructuring in the last few years, with 18 non-core businesses sold off, 31 plants closed and 8,450 workers laid off. Concerned about low profit margins and confused investors, ConAgra is now concentrating on three main businesses: retail foods, foodservice and ingredients. It no longer aims to own businesses across the food chain.
The company is currently the US’ largest foodservice manufacturer and second largest retail food supplier after Kraft Foods. It recorded sales of $27bn last year.