CHICAGO — ConAgra Foods, the processed-food company known for Slim Jim and Chef Boyardee, is splitting into two separate, publicly traded companies, spinning off its Lamb Weston division of frozen potato products, the company announced Wednesday.

ConAgra Brands, as it will be known, will comprise the company's name brands and will be headquartered in Chicago. After the split, which is expected in fall 2016, ConAgra shareholders will own shares of both companies. The transaction, the company said, will be treated as a tax-free spinoff.

ConAgra's Lamb Weston unit operates a large plant near Park Rapids, Minn., that makes French fries and other potato products. The facility, called Lamb Weston/RDO Frozen, will remain with the spun-off Lamb Weston, ConAgra said.

It is another big move under CEO Sean Connolly, who has vowed to make ConAgra a "higher-margin" and "more contemporary" company since he was hired in April.

ConAgra faces similar challenges as Kraft Heinz and Mondelez as customers have begun to eschew longtime brands for products with fewer ingredients that they consider healthier.

In October, ConAgra announced it would cut about 1,500 jobs and move its headquarters from Omaha to Chicago. Earlier this month, the company agreed to sell the majority of its private-label business to TreeHouse Foods for about $2.7 billion.

In fiscal 2015, the operations that will make up the majority of ConAgra Brands brought in about $7.2 billion in sales, according to a ConAgra release. Those brands include Marie Callender's, Hunt's, Rotel, Reddi-wip, Slim Jim, Pam, Chef Boyardee, Orville Redenbacher's, P.F. Chang's and Healthy Choice.

The Lamb Weston business made about $2.9 billion, according to ConAgra. Lamb Weston will be co-headquartered where it's currently based — in Eagle, Idaho, and Kennewick, Wash., according to ConAgra spokeswoman Lanie Friedman.

Why spin off a frozen potato business?

The company said in a statement that the separation will allow "greater management focus" on the two distinct businesses and increased flexibility to capitalize on long-term goals.

"We are confident that this separation will best position each company to compete and win while creating compelling long-term value for shareholders and delivering benefits to employees, customers and other key stakeholders," Connolly said.