ConAgra Foods, Inc. (NYSE:CAG) entered into a definitive agreement to acquire Ralcorp Holdings Inc. (NYSE:RAH) for $5 billion in cash on November 26, 2012. ConAgra will pay $90 for each share of Ralcorp. Under the terms of agreement, will acquire common stock, 0.26 million options at exercise price of $26.3 per share, 2.9 million Company Stock SARs at a weighted-average exercise price of $52.2 per share, 0.01 million Company Cash SARs at a weighted average exercise price of $66.5 per share, 0.14 million Company Restricted Shares, 0.18 million Company Stock RSUs and 0.08 million Company Cash RSUs. The purchase price also includes assumption of debt. The transaction will be financed primarily with cash on hand, existing credit facilities and new borrowings. ConAgra Foods has obtained a commitment letter from Bank of America, N.A. and Merrill Lynch, Pierce, Fenner & Smith Incorporated for a new $4.5 billion senior unsecured bridge facility and a $1.5 billion senior unsecured term loan. Post closing, Ralcorp will be a wholly-owned subsidiary of ConAgra Foods. Ralcorp will pay ConAgra Foods a termination fee of $180 million.

ConAgra Foods and Ralcorp will establish a transition team comprised of members of both management teams to prepare for and to oversee the integration of the businesses. Gary Rodkin, Chief Executive Officer of ConAgra Foods will continue to lead the combined company. The combined company's headquarters will remain in Omaha, Nebraska.

The transaction is subject to the approval two-thirds of the shareholders of Ralcorp, antitrust approvals in the United States and Canada and customary regulatory approvals and it has been unanimously approved by the Board of Directors of ConAgra and Ralcorp. The transaction is not subject to a financing condition. As reported on January 10, 2013, the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 expired. The transaction is expected to close on March 31, 2013. The transaction is expected to be accretive to EPS in Year 1 and bring modest fiscal benefit to ConAgra in 2013.

As of January 14, 2013, ConAgra Foods and Ralcorp received a “no-action letter” from the Canadian Competition Bureau confirming that the Commissioner of Competition does not intend to challenge ConAgra Foods' acquisition of Ralcorp. The transaction was approved by shareholders of Ralcorp on January 29, 2013.

Crestview Partners LLC and BofA Merrill Lynch acted as financial advisors and Arthur F. Golden, Marc O. Williams, James E. Elworth, Daniel N. Borlack, Jesse Kramer, Jean M. McLoughlin, Gillian Emmet Moldowan, Neil Barr, Anthony L. Oliva and Ronan P. Harty of Davis Polk & Wardwell LLP acted as legal advisors for ConAgra. Barclays Capital Inc. and Goldman, Sachs & Co. acted as financial advisors and fairness opinion providers and Steven A. Rosenblum, Steven A. Rosenblum, Nancy B. Greenbaum, Daniella Genet, Jorge M. Gutierrez, Ilene K. Gotts, Yuni Yan, Michael J. Segal, Timothy G. Moore, Mohit Gourisaria, Eric M. Rosof, Emily D. Johnson, T. Eiko Stange and Vincent G. Kalafat of Wachtell, Lipton, Rosen & Katz acted as legal advisor for Ralcorp. Steven Lipin and Gemma Hart of Brunswick Group acted as public relations advisors for ConAgra and Eric Brielmann, Eric Bonach and Aaron Palash of Joele Frank, Wilkinson Brimmer Katcher acted as public relations advisors for Ralcorp. David Schwartbaum, Joseph Gangitan of Greenberg Traurig, LLP acted as legal advisor for ConAgra Foods. Ethan Klingsberg, Benet O'Reilly, Victor Moura and Kyle Harris of Cleary, Gottlieb, Steen & Hamilton LLP acted as legal advisor for Barclays Capital Inc. and Goldman, Sachs & Co. Akin Gump Strauss Hauer Feld LLP acted as legal advisor for Corvex Management, who acted as activist investor of Ralcorp Holdings. Credit Suisse (USA), Inc. acted as financial advisor to Ralcorp. MacKenzie Partners, Inc. acted as an information agent and will be paid for a fee of approximately $30,000, plus reimbursement of reasonable out-of-pocket expenses. Ralcorp has agreed to pay Goldman Sachs a transaction fee of $10 million, $1 million of which is payable upon the delivery of Goldman Sachs' opinion and $9 million of which is contingent upon consummation of the merger. In addition, Ralcorp has agreed to reimburse Goldman Sachs' expenses arising, and indemnify Goldman Sachs against certain liabilities that may arise, out of its engagement. As compensation for the services offered by Barclays in connection with the merger, Ralcorp paid Barclays $1 million upon the delivery of Barclays' opinion. Additional compensation of $20.3 million will be payable on completion of the merger, against which the fee of $1 million paid upon delivery of Barclays' opinion will be credited. Bryan Cave, LLP acted as a legal advisor to Ralcorp Holdings Inc. Jones Day acted as a legal advisor to ConAgra Foods.

ConAgra Foods, Inc. (NYSE:CAG) completed the acquisition of Ralcorp Holdings Inc. (NYSE:RAH) on January 29, 2013.