Campbell sells Arnott’s and some international assets to KRR for US$2.2bn

AUSTRALIA – Campbell Soup Company has signed an agreement to sell its Australian snacks unit Arnott’s and some of its international operations to investment firm KKR for US$2.2 billion.

Under the terms of the agreement, Campbell and KKR will enter into a long-term licensing arrangement for the exclusive rights to use certain Campbell brands.

This will include Campbell’s, Swanson, V8, Prego,Chunky  and  Campbell’s  Real Stock, in Australia, New Zealand, Malaysia and other select markets in Asia, Europe, the Middle East and Africa.

Combined with the previously disclosed sale of Kelsen Group to Ferrero affiliate CTH, Campbell has announced the divestiture of its entire Campbell International division for an aggregate price of US$2.5 billion, which it will use to reduce debt.

Campbell CEO Mark Clouse 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 US$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.”

New York-based KKR said in a statement that it had signed a stock and asset purchase agreement with Campbell for the remainder of its international division.

“Campbell International represents a unique portfolio of iconic brands that are known and loved by consumers in Australia and across the world,” said David Lang, a partner at KKR’s Australia business.

“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,” he added.

Arnott’s, which makes a range of sweet and savoury biscuits, flavoured snacks, crackers and chocolate bars, was acquired by Campbell in 1997.

The unit’s regional headquarters are in Sydney, with operations in Western Sydney, Brisbane, Adelaide and Bekasi, Indonesia.

Arnott’s and Campbell’s International operations had combined net sales of approximately US$885 million in the last 12 months and employ approximately 3,800 people.

Closing for Arnott’s and Campbell’s International operations, as well as Kelsen Group, is expected in the first half of fiscal 2020.

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