Conagra will continue to manufacture products sold under the Wesson brand for up to one year following the close, after which Wesson will be merged into J.M. Smucker's oils manufacturing facility in Cincinnati, Ohio.
The Wesson brand, whose product offerings include vegetable, canola, corn and blended oils, would bolster Smucker's own Crisco oil brand, J.M. Smucker Chief Executive Mark Smucker said in a statement.
The deal marks another step by Chicago-based Conagra, which has been divesting many of its private label and condiment businesses to become a branded foods-only company.
The maker of Chef Boyardee pasta and Orville Redenbacher's popcorn also said in December that the company will be 91 percent branded after it spun-off its Lamb Weston unit.
Conagra reported a better-than-expected third-quarter profit in March, as it discontinued sales of lower-margin products and cut back on discounts.
J.M. Smucker said it expects the deal to add about $230 million to its annual net sales. Annual cost synergies are estimated to be $20 million within two years of the deal's close.
J. M. Smucker, which also sells Jif peanut butter, expects the deal to add about 10 cents per share to its adjusted earnings in the first full-year after close.
The transaction is subject to customary closing conditions, including regulatory approvals.
Shares of Conagra were down 1.3 percent at $38.53 in early afternoon trading on Tuesday, while J.M. Smucker was down marginally at $127.92.
Reporting by Nikhil Subba and Gayathree Ganesan in Bengaluru; Editing by Sriraj Kalluvila and Maju Samuel