ConAgra Foods, Inc. (NYSE: CAG) announced today the completion of the sale of its commodity trading and merchandising operations conducted by ConAgra Trade Group. ConAgra Trade Group was sold to an investor group led by Ospraie Special Opportunities Fund, which also includes global growth investor General Atlantic LLC and a private investment fund managed by Soros Fund Management LLC.ConAgra Trade Group was sold for approximately $2.8 billion, net of transaction costs and subject to post-closing adjustments.The final proceeds are higher than originally estimated due to increases in ConAgra Trade Group's book value, reflecting gains and additional working capital.

The Ospraie Special Opportunities Fund is an affiliate of Ospraie Management, a leading investment management firm focused exclusively on commodities and basic industries with approximately $9 billion under management.The sold businesses will now operate as The Gavilon Group, LLC.

The before tax proceeds from the sale include approximately $2.2 billion of cash, net of transaction costs (including incentive compensation amounts due to ConAgra Trade Group employees), and $550 million (face value) of payment-in-kind debt securities of a newly created holding company of The Gavilon Group.The weighted average interest rate on the debt securities is 10.82 percent.The face amount of debt securities received is higher than originally expected due to the greater overall transaction proceeds. ConAgra Foods also received a warrant exercisable for approximately 5 percent of the issued common equity of a newly created Gavilon holding company.The percentage is slightly lower than originally expected due to contract terms linking the warrant percentage to the investor group's level of equity investment.Ospraie and its co- investors made a greater overall equity investment in the business, reducing the warrant interest but creating what the company believes is a stronger capital structure in relation to the payment-in-kind notes.Although the purchase agreement granted ConAgra Foods the right to a portion of The Gavilon Group's earnings during the remainder of calendar 2008, the maximum earnings threshold in the applicable profit sharing formula was reached prior to closing, removing any future benefit to ConAgra Foods from this provision.Non-cash consideration received, principally the payment-in-kind debt securities, will be recorded at fair value to reflect an appropriate discount based on the features of the securities and current market conditions.

Also today, ConAgra Foods announced that its Board of Directors has authorized a $500 million increase to the company's existing share buyback program.Shares are expected to be repurchased periodically, depending on market conditions, and through open- market or privately negotiated transactionsThe Board of Directors has authorized management to engage in an accelerated share repurchase arrangement, yet to be negotiated.

ConAgra Foods will discuss its capital allocation plans in detail during its fourth quarter earnings release Thursday, June 26.The specifics of the plans are still being developed, but are expected to include significant application of the after-tax cash proceeds from the transaction toward share repurchases, and the application of a significant amount toward reducing interest bearing debt, primarily commercial paper balances that financed the greater-than-planned working capital balances at ConAgra Trade Group. The company expects most of this activity to be completed in the first half of fiscal 2009 and will update investors on its progress in its regularly scheduled communications.

Greg Heckman, formerly president of ConAgra Foods' commercial businesses, is now chief executive of The Gavilon Group which will remain in its current offices in Omaha. The Gavilon Group will conduct grain and byproducts merchandising and fertilizer distribution, as well as agriculture, energy and other commodity trading activities, and risk management services.