December 1, 2022

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Food loaded for bear

Why one of America’s favorite hot dog brands may be up for sale [Video]

Conagra Brands (CAG) may be cooking up yet another sizzling deal.

The packaged food giant is in talks to sell its Hebrew National hot dog brand to Brazil’s JBS SA, according to a report from The Wall Street Journal. A deal may also include the Egg Beaters and Odom’s Tennessee Pride brands, the report says. Total consideration for the brands is reportedly $700 million.

Conagra has been a dealmaking machine since CEO Sean Connolly took over in 2015. Connolly has moved aggressively to reshape the portfolio so Conagra plays in new, faster-growing eating trends — namely a rise in snacking and millennials eating more frozen food. All three of the brands reportedly on the sales block do not play in those consumption trends, by and large.

A Conagra Brands spokesperson declined to comment on the report to Yahoo Finance.

Conagra acquired the well known Hebrew National and Egg Beaters brands in 1993 and 1998, respectively. A source tells Yahoo Finance, Hebrew National, Egg Beaters and Odom’s have racked up nearly $550 million in sales over the last 12 months.

Hebrew National beef franks made by ConAgra Foods are shown in this illustration photograph taken in Encinitas, California, U.S. June 27, 2016.        REUTERS/Mike Blake

Hebrew National beef franks made by ConAgra Foods are shown in this illustration photograph taken in Encinitas, California, U.S. June 27, 2016. REUTERS/Mike Blake

For Conagra shareholders, the potential sale of these three brands shouldn’t be a shock.

Since November 2015, Conagra has sold private label food businesses, Wesson oil business and Peter Pan nut butter business. In its place, Connolly has purchased frozen food behemoth Pinnacle in 2018 for $10.9 billion and Angie’s popcorn maker in 2017 for an undisclosed sum.

“If you think about our key growth priorities, you’re pretty much looking at frozen and snacking. Those are our two priority areas, not that we wouldn’t consider a bolt on [acquisition] elsewhere. But that’s usually where we look first to strengthen our business because we believe we have tremendous runway in those two verticals,” Connolly told Yahoo Finance Live in mid-January.

The Street looks to be keen on Conagra jettisoning hot dogs and liquid eggs.

“This would represent another step towards improving the quality of the Conagra portfolio,” Credit Suisse analyst Robert Moskow said. “Prior to the pandemic, the two meat brands had been declining at a 3% three-year CAGR and Egg Beaters was declining double-digit.”

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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