CHICAGO — Conagra Brands Inc. has entered into an agreement to acquire Pinnacle Foods Inc., Parsippany, N.J., for approximately $10.9 billion. The transaction has been approved by the boards of directors for both companies and is expected to be completed by the end of 2018. The acquisition of Pinnacle Foods will strengthen Conagra’s position in the frozen food market. Pinnacle Foods owns such brands as Birds Eye, Mrs. Paul’s and Hungry Man. Pinnacle Foods also has strong presences in the center of the retail store and in the market for gluten-free products.

“After three years of transformative work to create a pure-play, branded food company, we are well positioned to accelerate the next wave of change,” said Sean Connolly, president and CEO of Conagra Brands. “The addition of Pinnacle Foods’ leading brands in the attractive frozen foods and snacks categories will create a tremendous opportunity for us to further leverage our proven innovation approach, brand-building capabilities, and deep customer relationships.”

The combined company will have sales of approximately $11 billion based on both companies’ fiscal year results. Under the terms of the agreement, Pinnacle Foods shareholders will receive $43.11 per share in cash and 0.6494 shares of Conagra Brands common stock for each share of Pinnacle Foods held. The implied price of $68 per Pinnacle Foods share is based on the volume-weighted average price of Conagra Brands’ stock for the five days ended June 21, 2018. The purchase price reflects an adjusted EBITDA multiple of 15.8x, based on Pinnacle Foods’ estimated fiscal year 2018 results excluding synergies.

“Today’s transaction provides Pinnacle Foods shareholders with substantial and immediate value, as well as the opportunity to participate in the significant upside potential of the combined company,” said Mark Clouse, CEO of Pinnacle Foods.

Conagra Brands expects the transaction to be low single-digit accretive to adjusted earnings per share on a percentage basis in the fiscal year ended May 2020 and high single-digit accretive to adjusted e.p.s. in the fiscal year ended May 2022. Conagra management added that it forecasts $215 million in annual costs synergies by the end of fiscal 2022.