[27 June/Reuters]

Conagra said it would buy Pinnacle Foods for about $8.1 billion in an attempt to obtain a bigger share of the snack and frozen food markets amid fierce competition in the packaged food industry. The deal would make Conagra the second largest U.S. frozen food maker after Nestle. They had been investing aggressively to become the fastest growing frozen meal companies. The combined market capitalisation of Conagra and Pinnacle Foods would be about USD23 billion. Conagra Chief Executive, Sean Connolly, said the deal would help the company cut down on supply chain costs and strengthen its relationship with retailers. Including debt, the deal was valued at USD10.9 billion. Congara fell 7 percent and Pinnacle fell 4.2 percent. Stifel Analyst, Christopher Growe, said the implied price was below the price he expected, and that the offer was a bit surprising.