And changing its name.
ConAgra Foods CAG , the maker of Slim Jim beef jerky and Chef Boyardee pasta, said it would spin off its Lamb Weston frozen potato products business into a separate public company and rename itself Conagra Brands.
ConAgra, which has reported flat or falling sales in four of the past six quarters, is struggling to boost growth as consumers shift from packaged products to fresh foods in search of healthier options.
Lamb Weston will hold ConAgra’s frozen potato, sweet potato, appetizers and other vegetable products businesses.
Conagra Brands will hold the remaining businesses, including the units that supply to restaurants and grocers, distribute ingredients and make flavors and seasoning as well as some private label operations.
ConAgra shares rose 1.6% to $40 in light premarket trading on Wednesday.
The tax-free spinoff is expected to be completed in the fall of 2016, the company said.
“We carefully considered a variety of strategic alternatives, and believe that the separation of our Lamb Weston specialty potato business from our consumer brands business is the best way to drive shareholder value,” Chief Executive Sean Connolly, who will head Conagra Brands, said in a statement.
The businesses forming Conagra Brands had combined sales of about $9 billion in the year ended May, while Lamb Weston generated about $2.9 billion.
ConAgra’s other popular brands include Marie Callender’s frozen meals, Hunt’s ketchup and Reddi-wip whipped cream.
The company said this month that it would sell its private-label unit to TreeHouse Foods, after it came under pressure from Jana Partners, its second-biggest shareholder with about 7% stake.