Billion dollar merger in US food industry

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.