Conagra Brands on Wednesday announced plans to acquire Pinnacle Foods in a cash-and-stock deal valued at about $8.1 billion that furthers Conagra's transformation under CEO Sean Connolly and its push into frozen foods.

Including debt, the deal is valued at $10.9 billion.

The pairing of Healthy Choice-owner Conagra and Bird's Eye-owner Pinnacle would create the second-largest U.S. frozen food company behind Nestle, analysts at RBC Capital Markets have written. Conagra has poured money into its frozen business, with an eye toward repackaging and reformulating its products to cater to younger diners.

Shares of both companies were down in early morning trading on the news, suggesting a tepid response to the deal. Pinnacle's stock was down 3.94 percent, while Conagra's shares were down 6.75 percent.

That dip may have reflected arbitrage investing activity that frequently accompanies deals in which an acquirer funds its purchase with stock. It may also reflect broader concerns about the pressures facing the food industry at large, including slow growth, rising costs and margin squeezing retailers.

The deal values Pinnacle at $68 a share, less than previous analysts' estimates of closer to $75 a share. On a multiple of earnings before interest, taxes, depreciation and amortization (EBITDA) basis, the deal valued Pinnacle at 16 times, according to analysts at Stifel, less than other recent deals like Campbell Soup's acquisition of Snyder's-Lance.

Under the agreement, Pinnacle shareholders will receive $43.11 per share in cash and 0.6494 shares of Conagra's common stock for each share of Pinnacle. Pinnacle shareholders are expected to own approximately 16 percent of the combined company.

The deal is the culmination of on-again, off-again talks the two have had for years. It comes months after activist investor Jana Partners disclosed a roughly 9 percent stake in Pinnacle and said it planned to talk with the company about a possible sale.

Jana has a track record with the pairing, having previously taken a stake in and pushed for changes at Conagra.

Meantime, Conagra CEO Connolly brings to the deal his own track record. Connolly was CEO of Hillshire Brands when it attempted to buy Pinnacle in 2014. Hillshire, though, ultimately scrapped that deal in favor of a sale to Tyson Foods.

The deal is targeted to close by the end of the year, but still needs approval from Pinnacle shareholders.