Campbell Soup is hungry for pretzels, chips and popcorn.
Soup gross sales have lagged, so Campbell introduced on Monday that it is shopping for Snyder’s-Lance for $50 a share in an all-cash deal valued at $four.9 billion. Snyder’s-Lance makes snacks similar to Snyder’s of Hanover pretzels, Cape Cod and Kettle potato chips and Pop Secret popcorn.
Shopping for Snyder’s-Lance will “dramatically rework Campbell, shifting our middle of gravity,” Campbell CEO Denise Morrison stated in an announcement.
Campbell already owns Pepperidge Farm, which makes Goldfish crackers and Milano cookies. However snacks at the moment account for only a third of Campbell’s gross sales. Most of its different holdings are soup and sauce manufacturers.
After the deal, snacks will make up practically half of Campbell’s gross sales.
Campbell is below stress to broaden its choices as meals costs drop at grocery shops. Shares of Campbell ( are down 17% this yr. )
Soup gross sales have fallen 9% since final yr, the corporate reported in November. A spat with Walmart over pricing and shelf house contributed to the drop. Campbell’s share of the U.S. soup market has dropped seven proportion factors over the past 5 years to 42%, in accordance with analysis agency Euromonitor.
However snacks have been a brilliant spot for the corporate. Pepperidge Farm gross sales have been up three% final quarter throughout an in any other case lackluster summer season.
In Snyder’s, Campbell is getting is a scorching snack meals firm whose gross sales have grown practically 12% a yr over the previous 5 years. That has far outpaced the remainder of the $89 billion U.S. snack business.
Campbell is paying a 27% premium on Snyder’s-Lance’s inventory value and is taking over greater than $6 billion in debt to finance the acquisition.
Along with snacks, Campbell’s additionally needs to develop recent meals unit, which accounts for 12% of gross sales. Final week, Campbell accomplished a $700 million buy for Pacific Meals, an organization that makes natural soups and drinks.
Shares of Snyder’s-Lance ( opened at document excessive Monday. Campbell ticked up 1%. )
CNNMoney (New York) First printed December 18, 2017: 11:10 AM ET
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