Pinnacle has a market capitalization of $7.9 billion, while Conagra's is $15.1 billion.
A pairing of Healthy Choice-owner Conagra and Bird's Eye-owner Pinnacle would combine two companies with a large presence in frozen foods at a time when the category is seeing a resurgence. Food companies, including Conagra, have poured money into previously neglected brands to highlight their healthiness, affordability and ease of use.
The two combined would create the second-largest U.S. frozen food company, analysts at RBC Capital Markets recently wrote. The other major players include Kraft Heinz and Nestle, the latter of which is the largest in the U.S., according to RBC.
It is at least the second time the two have had such talks in as many years. Conagra approached Pinnacle about a tie-up last year, but the two parties could not agree on a price and discussions were short-lived, sources have told CNBC.
The deal talks come after activist hedge fund Jana Partners recently disclosed a roughly 9 percent stake in Pinnacle and said it planned to talk with the company on a range of subjects, including a possible sale.
Bloomberg first reported the approach. Both companies declined to comment.
An acquisition of Pinnacle would, for Conagra, be a continuation of its efforts to reinvent itself since selling its private-label unit for $2.7 billion in 2016 to focus on its branded food business. At the time of the sale, Jana had taken a roughly 7.2 percent stake in the company and was pushing for changes.
In 2016, Conagra spun off its $6.9 billion frozen potato business, Lamb Weston Holdings. It has since been buying a number of small brands to modernize a portfolio that includes Orville Redenbacher's popcorn and Hebrew National hot dogs. Its acquisitions include the parent of Angie's Boomchickapop and the parent of Duke's meat snacks.
Such deals, though, are small bites in comparison to a potential acquisition of Pinnacle. Conagra's CEO, Sean Connolly, recently told analysts that "M&A remains a central part of [the company's] plan," and that Conagra intends to pursue a range of deals including, "modernizing acquisitions, synergistic acquisitions and select divestitures."
Connolly has a history with Pinnacle. In his former role as CEO of Hillshire Brands, he also attempted a 2014 takeover of the company, though Hillshire ultimately scrapped that deal in favor of a sale to Tyson Foods.
In the time since, Pinnacle has undergone its own changes. It acquired Boulder Brands, owner of healthy food brands like Udi's and Glutino, for roughly $975 million in 2016.
Still, Pinnacle is seeing its strongest growth in its frozen food business, which is the company's largest and last quarter grew at a rate of 7.5 percent. Its Boulder business grew 0.5 percent and its grocery business, which includes brands like Vlasic pickles, Duncan Hines cake mix and Wish-Bone salad dressing grew 0.6 percent. The latter has been squeezed as consumers eye healthier, cheaper or newer alternatives.
While big food companies across the board have seen sales stall as they struggle with the burden of having large brands out of touch with today's shoppers, frozen food has been one of few the categories they have been able to revive through investment. It is a category that benefits particularly from scale.
It has also, therefore, been a center of M&A activity. Schwan's Co., maker of frozen foods like Tony's pizza, hired a bank last year to weigh a sale, CNBC then reported. Nomad Foods earlier this month announced its plans to acquire U.K. frozen potato and pudding company Aunt Bessie's. The company has swooped up a number of frozen food brands over the past few years, including Findus and Iglo.