(Reuters) - Reddi-wip whipped cream owner Conagra Brands Inc (CAG.N) has concluded talks to acquire Pinnacle Foods Inc (PF.N), the maker of packaged foods such as Vlasic pickles, after failing to agree on a price, a person familiar with the matter said on Friday.
Chicago-based Conagra had approached Parsippany, New Jersey-based Pinnacle to express interest in a possible acquisition, Reuters reported on Wednesday.
The deal would have combined brands such as Conagra's Orville Redenbacher's popcorn with Pinnacle's Duncan Hines baking products and Birds Eye frozen vegetables, as both companies grapple with slowing frozen and packaged food sales.
The source asked not to be identified because the talks were confidential. Conagra and Pinnacle both declined to comment.
Pinnacle Foods shares dropped 7.7 percent to $60.83 after CNBC first reported the unsuccessful conclusion of the talks, giving the company a market capitalization of $7.2 billion. Conagra shares were down 1.6 percent to $39.30, giving it a market capitalization of $16.7 billion.
Conagra's approach shows that Pinnacle Foods remains an acquisition target, three years after its $4.3 billion sale to Hillshire Brands was canceled after Hillshire agreed to sell itself to Tyson Foods Inc (TSN.N) for $7.7 billion.
Hillshire was led at the time by Sean Connolly, who is now chief executive of Conagra. His second attempt at an acquisition of Pinnacle Foods underscores the need for further consolidation in the frozen food and condiments sectors, as sales continue to decline with consumers opting for healthier choices.
Conagra has been seeking to reinvent itself since selling its private label unit for $2.7 billion in 2016 to focus on its branded food business. Last year it spun off its $6.9 billion frozen potato business, Lamb Weston Holdings Inc (LW.N).
It has also divested a number of its smaller underperforming brands, and this week agreed to sell its Wesson oil brand to Folgers coffee maker J.M. Smucker Co (SJM.N) for $285 million.
Pinnacle Foods has made a push toward healthier offerings. It bought Boulder Brands Inc, owner of Udi's Gluten Free Bread, for $975 million last year.
Conagra and Pinnacle Foods are among the companies weighing offers for Reckitt Benckiser Group's (RB.L) North American food business, estimated to be worth around $3 billion, Reuters reported on Wednesday.
Reporting by Lauren Hirsch in New York; Editing by Dan Grebler