Acquisitions

6 Months Ended

Nov. 27, 2011

Acquisitions [Abstract]

ACQUISITIONS

2. ACQUISITIONS

In the first quarter of fiscal 2011, we acquired the assets of American Pie, LLC (“American Pie”) for $131.0 million in cash, plus assumed liabilities. American Pie is a manufacturer of frozen fruit pies, thaw and serve pies, fruit cobblers, and pie crusts under the Marie Callender’s ^® and Claim Jumper^® trade names, as well as frozen dinners, pot pies, and appetizers under the Claim Jumper^® trade name. Approximately $51.5 million of the purchase price was allocated to goodwill and $61.3 million was allocated to brands, trademarks and other intangibles. The amount allocated to goodwill is deductible for income tax purposes and is primarily attributable to American Pie’s product portfolio, as well as anticipated synergies and other intangibles that do not qualify for separate recognition. This business is included in the Consumer Foods segment.

On November 28, 2011, subsequent to the end of our second quarter of fiscal 2012, we acquired an additional equity interest in AgroTech Foods Limited (“ATFL”) for approximately $10 million in cash. ATFL is an Indian public limited company that markets food and food ingredients to consumers and institutional customers in India. As a result of this investment, we now have a majority interest (approximately 52%) in ATFL. Accordingly, we will consolidate the financial statements of ATFL beginning in the third quarter of fiscal 2012. Prior to our acquisition of a majority interest in ATFL, we accounted for our noncontrolling interest (approximately 48%) under the equity method. In accordance with the acquisition method of accounting, we will remeasure our previously held noncontrolling equity interest in ATFL at fair value and record a gain of approximately $59 million in the third quarter of fiscal 2012, which represents the excess of the fair value over the carrying value of our noncontrolling equity interest in ATFL. This business will be included in the Consumer Foods segment.

On November 30, 2011, subsequent to the end of our second quarter of fiscal 2012, we acquired National Pretzel Company for approximately $296 million in cash, plus assumed liabilities. National Pretzel Company is a private label supplier and branded producer of pretzels and related products. All products are produced at its manufacturing facilities in California and Pennsylvania. This business, which has annual sales in excess of $175 million, will be included in the Consumer Foods segment.