Campbell Soup to sell Arnott’s and others to KKR for $2.2bn

Food acquisition news : Campbell Soup Company has agreed to sell its Australian biscuit brand Arnott’s and some of its international operations to global investment firm KKR for $2.2 billion.

Along with the previously announced sale of Kelsen Group, Campbell has announced the sale of its entire Campbell International division for a total price of $2.5 billion. (Read : Campbell Soup to sell Kelsen Group to Ferrero affiliate for $300m)

Arnott’s, which was acquired by Campbell Soup in 1997,  is based in Sydney and has operations in Western Sydney, Adelaide, Brisbane in Australia and Bekasi in Indonesia.

Campbell’s international operations include its simple meals businesses across Australia, Hong Kong, Malaysia, and Japan, and manufacturing capabilities in Australia and Malaysia.

Put together, Arnott’s and Campbell’s international operations had net sales of around $885 million in the latest 12 months and employ nearly 3,800 people.

Campbell Soup to sell Arnott’s and others to KKR for $2.2bn. Photo courtesy of CSC BRANDS, L.P.

Campbell Soup made an announcement in August 2018 to sell Campbell International and Campbell Fresh to focus on its core North American businesses and cut down its debt. The US canned soups producer wrapped up the sale of its Campbell Fresh business in June 2019 to generate a capital of nearly $565 million.

Campbell Soup will use the expected total net proceeds of $3 billion to bring down its debt.

Mark Clouse – President and CEO of Campbell Soup said: “This was a thorough and complex process in which we considered many options. 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.”

As per the transaction terms, Campbell Soup and KKR will forge a long-term licensing arrangement for the exclusive rights to use some of the Campbell brands like Campbell’s, V8, Swanson, Chunky, Prego, and Campbell’s Real Stock, in Australia, New Zealand, Malaysia and certain other markets in Asia, Europe, Africa, and the Middle East.

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.”

The completion of the sale of Arnott’s and some of its international operations, and also Kelsen Group, is likely to be in the first half of fiscal 2020.

Campbell Soup was advised by Centerview Partners, Goldman Sachs, Gotshal & Manges, Weil, and King & Wood Mallesons. On the other hand, KKR was advised by Jefferies as its financial advisor, and Simpson Thacher & Bartlett and Allens, who are its legal counsels for the transaction