Conagra Brands, Inc. (NYSE: CAG) disclosed that it is planning to divest its Hebrew National hot dog brand to Brazilian meat processor JBS SA. Sources disclosed that there are chances that the deal would also include the liquid egg white brand Egg Beaters and sausage product brand Odom's Tennessee Pride, and could be priced at around $700 million.
Sources revealed that there is a possibility that the firm might disclose the deal in the coming week and there are also the chances that Conagra would retain its business or explore the new seller for its brands. Shares of Conagra Brands went down 1.34% at $36.04 during the trading session of Tuesday.
The food firms have seen a surge in the demand for in-home eating which also strengthens the balance sheet of slow growth firms. Food firms are exploring ways to remodel their portfolio with the changing demands of the customers.
Furthermore, Conagra is also intending to sell its $1.0 trillion refrigerated brands because of the decreasing profit in the refrigerated section. The firm is also considering the decision because it wants to exploit $680 million in tax assets to compensate for capital increases that end in 2021.
In the coronavirus pandemic, the Hebrew National Brand of CAG has seen an increase in sales and has gathered huge sales in the last two quarters. Credit Suisse projects that the brand generates $200 million in sales yearly, while Egg Beaters brings in $45 million. If a deal confirms it will be the third deal in the past six months of CAG.