US-based packaged food company ConAgra has approved the acquisition of rival food brand Ralcorp in a deal worth $6.8bn including debt.

As per the terms of the agreement, ConAgra will offer $90 per share in cash for each share of common stock held, representing a 28.2% premium over the closing price of Ralcorp’s common stock on 26 November 2012.

The deal was moved forward following increased pressures from majority shareholders of Ralcorp with ongoing discussions now totalling 18 months.

Commenting on agreement ConAgra chief executive officer Foods Gary Rodkin said that they are pleased to have reached an agreement with Ralcorp after a period of collaborative dialogue between the two companies.

"The transaction will allow us to apply our scale and combined operational expertise to this important growth area, and will strengthen our position as one of the leading food companies in North America," added Rodkin.

Completion of transaction is expected by 31 March 2013 and will create one of the largest private label packaged food business in North America, with annual sales of $18bn besides combined private label sales of nearly $4.5bn.

ConAgra Foods will finance the acquisition with cash on hand, existing credit facilities and new borrowings from Bank of America Merrill Lynch.