ConAgra Foods, Inc. Offers To Acquire Ralcorp

ConAgra Foods intends to leverage its existing infrastructure and productivity capabilities to drive significant cost synergies. The company estimates the proposed combination will result in approximately $250 million in annual cost savings by the third year after closing, primarily from supply chain efficiencies. The company is also confident this transaction will improve its current sales and EPS growth rates as well as operating margins. ConAgra Foods will provide additional details on these matters as it finalizes its synergy estimates and financing components.

To finance the proposed $86 per share all-cash transaction, ConAgra Foods will use cash on hand and plans to issue debt. The company is committed to its investment grade credit rating. ConAgra Foods believes that the combined company would continue to generate strong cash flow and remains committed to a strong dividend.

ConAgra Foods has a high regard for Ralcorp's employees and believes that the combined company would benefit from the expertise of both companies' employees. ConAgra Foods is committed to investing in its employees and the communities in which they live and work.

An initial letter of interest was sent to the Ralcorp Holdings, Inc. board of directors on March 22, 2011, which proposed $82 per Ralcorp share, in a combination of cash and ConAgra Foods stock. This letter was sent one day after Ralcorp's stock closed at $65.31 per share. On May 4, 2011, ConAgra Foods delivered to Ralcorp's board of directors a revised proposal at $86 per share, all-cash, reiterating ConAgra Foods' desire to initiate a dialogue with the goal of consummating a transaction. ConAgra Foods will maintain a financially disciplined approach in this transaction.