Campbell Soup To Sell International And Fresh-food Businesses
Campbell Soup Co. (CPB) said Thursday it plans to sell its International and fresh foods business after a review of its portfolio in order to improve performance.
The company would be divesting its Campbell International and Campbell Fresh units. It plans to use proceeds from the sale of these units to significantly reduce its debt. The company will focus portfolio on Campbell Snacks as well as Campbell Meals and Beverages in its core North American market.
Campbell's debt load has more than tripled after its acquisition of snacking company Snyder's-Lance Inc., which was announced in December 2017.
Campbell International consists of Arnott's and the Kelsen Group, along with the company's manufacturing operations in Indonesia and Malaysia as well as its businesses in Hong Kong and Japan.
Campbell Fresh includes Bolthouse Farms, Garden Fresh Gourmet and the company's refrigerated soup business. Net sales of these two businesses in fiscal 2018 totaled about $2.1 billion.
Campbell has engaged Goldman Sachs and Centerview Partners to commence a process to divest the two units. A divestiture of the low-margin fresh food business is expected to enable Campbell to boost sales of its soups and snack brands.
"The Board concluded that, at this time, the best path forward to drive shareholder value is to focus the company on two core businesses in the North American market with a proven consumer packaged goods business model..," said Campbell's interim President and CEO Keith McLoughlin.
As a result of this more focused portfolio, Campbell has increased its cost savings target to $945 million by fiscal 2022.
However, the divestitures are unlikely to appease activist investor Daniel Loeb's Third Point LLC, which believes that a sale of Campbell Soup is the "only justifiable outcome."(dpa)
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