By Ovunc Kutlu
NEW YORK (AA) – A megamerger in the U.S. food industry will see a packaged foods firm to acquire a frozen food company for nearly $11 billion.
Chicago-based packaged foods company Conagra Brands announced Wednesday it will buy New Jersey-based Pinnacle Foods for $10.9 billion.
The boards of both comapnies have unanimously approved the merger agreement, which will include Pinnacle Foods' debt as well, according to a statement by Conagra Brands.
The agreement will expand Conagra Brands' “presence and capabilities in its most strategic categories, including frozen foods and snacks, ” according to a statement said.
“Based on both companies' latest fiscal year results, pro forma net sales would have been approximately $11 billion, ” it added.
After the announcement, Wall Street did not warm to the idea of a merger.
Conagra Brands shares were down 6.7 percent at 2 p.m. EST (1800GMT), while Pinnacle Foods saw its stock decline 4.1 percent.
