Campbell Soup puts Arnott’s on sales table

BRIDGET CARTER
AUGUST 30, 2018
Australian biscuit brand Arnott’s has been put up for sale by its US-owner Campbell Soup as part of plans to offload its international operations and refrigerated-foods business.
Campbell plans to divest the two businesses, which bring in $US2.1 billion ($2.87bn) in annual revenue, including Arnott’s, the New Jersey-based Campbell Soup said Thursday night. The Australian’s DataRoom column revealed in July that a sale of Arnott’s was being explored.
Arnott’s is one of Australia’s most recognisable food companies — the largest producer of biscuits and the second-largest producer of snack foods — with brands including Tim Tam, Mint Slice, Wagon Wheels, Shapes, Salada, Vita Weat and Cruskits.
The Australian business generated $1.09bn of revenue in 2015 and has 4300 employees based in Sydney, according to latest corporate filings. Campbell’s bought Arnott’s in 1997 and had been increasing its stake in the company since the 1980s, when Arnott’s sought backing to avoid a takeover by Nabisco.
Although the Arnott family retained an interest in the company, a failed foray into snack foods and a slump in the Australian economy forced the eventual sale. Any buyers for Arnott’s would probably be private equity firms, sources say, rather than trade buyers.
The planned divestitures would cut Campbell’s revenue by about 25 per cent.
Campbell plans to use proceeds from the sales of the businesses to reduce its long-term debt, which more than tripled after it bought Snyder’s-Lance pretzels, chips and nuts earlier this year. The company also plans to boost the size of its cost-cutting ­initiative.
“Campbell has engaged Goldman Sachs and Centerview Partners to commence a process to divest its Campbell International and Campbell Fresh businesses in a manner that maximises value,” the New York Stock Exchange-listed company said on Thursday night.
Campbell International consists of Arnott’s and the Kelsen Group, along with the company’s manufacturing operations in Indonesia and Malaysia and its businesses in Hong Kong and Japan.
Campbell Fresh includes Bolthouse Farms, Garden Fresh Gourmet and the company’s refrigerated soup business. Fiscal 2018 net sales of these businesses totaled approximately $US2.1 billion. Proceeds from the divestitures will be used to significantly reduce debt.
Additional reporting: Dow Jones Newswires