ConAgra Foods will buy Ralcorp Holdings to form one of the largest packaged food companies in North America, with combined revenue of about $18 billion a year, the two companies announced on Tuesday.
Under the terms of the deal, Ralcorp shareholders will receive $90 a share in cash, 28 percent above Ralcorp's closing price on Monday.
Including debt, the transaction is valued at about $6.8 billion. Last year, Ralcorp rejected a $5.2 billion takeover bid from ConAgra.
ConAgra Foods, which owns several grocery store brands including Egg Beaters and Chef Boyardee, said the merger would help it expand in the private label business, which makes products for bakeries, restaurants and other food service customers.
“Ralcorp is already the largest private label food company in the U.S. and is well positioned for future growth,†Gary M. Rodkin, chief executive of ConAgra Foods, said in a statement. “Adding Ralcorp provides us with a much larger presence in the attractive and growing private label segment.â€
