OMAHA, NE -- ConAgra Foods has reached a definitive agreement to sell its private-label operations to TreeHouse Foods for approximately $2.7 billion in cash.
Under the terms of the agreement, ConAgra Foods will divest the vast majority of its private-label operations, which includes a network of 32 manufacturing facilities in the U.S., Canada and Italy.
ConAgra Foods, maker of Orville Redenbacher and Chef Boyardee, will keep some of its private label operations for canned pasta, cooking spray, peanut butter and pudding.
The company expects to generate approximately $2.7 billion in proceeds from the sale, less transaction expenses, and intends to utilize the net proceeds primarily for debt reduction. The transaction is expected to close in the first quarter of 2016.
The deal comes one month after ConAgra said it will cut 1,500 jobs, about 30% of its office workers, and move its headquarters to Chicago from Omaha.
TreeHouse was spun off from Dean Foods in 2005. The Oak Brook, IL-based company manufactures foods for retail, foodservice and office coffee.