US food giant Campbell Soup Company has confirmed the sale of Australian biscuit company Arnott’s along with the rest of its international division.
Campbell’s announced on Friday that it signed a definitive agreement with global investment firm KKR for US$2.2 billion (AU$3.14 billion), subject to customary purchase price adjustments.
In late July, sources told the Australian Financial Review that a deal had been done but the companies remained silent on the sale until Friday.
Combined with the recent sale of Danish snacks company Kelsen Group to a Ferrero affiliated firm for $300 million, the FMCG giant managed to offload its entire Campbell International division for an aggregate price of US$2.5 billion.
Campbell and KKR will enter into a long-term licensing arrangement for the exclusive rights to use certain Campbell brands, including Campbell’s, Swanson, V8, Prego, Chunky and Campbell’s Real Stock, in Australia, New Zealand, Malaysia and select markets in Asia, Europe, the Middle East and Africa.
It is understood that the initial licensing agreement for these brands is for 15 years, after which KKR and Campbell have the opportunity to extend it for an additional 10 years.
David Lang, member at KKR, said, Campbell International represents a “unique portfolio of iconic brands that are known and loved by consumers in Australia and across the world”.
“We are privileged and excited to have the opportunity to invest in and grow Arnott’s as an independent business in Australia, in addition to further developing Campbell’s trusted brands across the broader Asian market. This is a milestone investment for KKR, and we look forward to working closely with the Campbell International management team to seek out new and exciting opportunities,” Lang said on Friday.
Arnott’s, the company behind Aussie favourites such as Tim Tam, Mint Slice and Shapes, was acquired by Campbell in 1997. Arnott’s and Campbell’s International operations had combined net sales of around US$885 million in the latest 12 months and employ approximately 3,800 people between them.
Campbell’s president and CEO Mark Clouse said the sale was a “thorough and complex process”.
“Our approach has resulted in agreements that we believe generate the greatest value from our international assets. By applying almost $3 billion of divestiture net proceeds to reduce debt, Campbell’s balance sheet will be stronger and capable of supporting our plan to grow our focused and differentiated portfolio,” Clouse said in a statement on Friday.
Campbell’s announced plans to sell its international division in August last year, in an effort to clear debts and focus on its core North American businesses.
The company also sold its Campbell Fresh operations in June 2019, generating proceeds of approximately US$565 million.
