Darden Restaurants on Friday said it agreed to sell its struggling Red Lobster restaurant chain to Golden Gate Capital for $2.1 billion.
The company said it expects net cash proceeds of about $1.6 billion, of which about $1 billion would be used to retire debt.
The remainder would be used to buy back up to $700 million of shares in fiscal 2015, Darden said.
The company said in December that it planned to spin off or sell the 705-restaurant Red Lobster seafood chain, and said at the time that the transaction would not require a shareholder vote.
Investor Starboard Value had opposed the sale, calling on the company in January to rethink its strategy for improving results.
Shares of Darden, which peaked at around $56 in September 2012, moved higher in premarket trading following the announcement. (Click here for the latest quote.)
—By Reuters. CNBC contributed to this report.