ConAgra selling private label unit to TreeHouse Foods for $2.7 billion

ConAgra Foods (CAG) is selling its private label business to TreeHouse Foods (THS) for about $2.7 billion as part of a strategy to focus more on its consumer brands.

The announcement Monday comes about three years after ConAgra acquired Ralcorp Holdings, a move that significantly expanded its private label operations. Now the maker of brands such as Orville Redenbacher and Chef Boyardee is aiming to focus more on its consumer-facing and commercial businesses while building more efficient operations.

ConAgra will hold on to some parts of the private label business that align with its existing operations and facilities, including production of canned pasta, cooking spray and peanut butter.

The deal will help turn ConAgra "into a focused, higher-margin, more contemporary and higher-performing company," CEO Sean Connolly said in a company statement.

Last month, ConAgra said it would cut 1,500 jobs and relocate its headquarters to Chicago from Omaha, Neb., as part of plans to become a more efficient business.

TreeHouse Foods is a private-label food company that owns the businesses Flagstone Foods, E.D. Smith and Bay Valley Foods. The company said its acquisition of ConAgra's private-label business expands TreeHouse's portfolio of dry and refrigerated grocery products.