19 Dec 2017 --- The Campbell Soup Company has now made it official by announcing the US$4.87bn acquisition of Snyder's-Lance, in a deal said to be the soup company's largest ever in its 148-year history. Traditional companies like Campbell have been struggling against a backdrop of shifting food preferences in markets all over the world, however, Campbell’s is hoping the addition of Snyder’s snacks brands will shore up its position in-store.
Campbell Soup Company and Snyder’s-Lance have entered into an agreement for Campbell to acquire Snyder’s-Lance for US$50.00 per share in an all-cash transaction.
The purchase price represents a premium of approximately 27 percent to Snyder’s-Lance’s closing stock price on Dec. 13, 2017, the last trading day prior to media reports regarding a potential transaction.
The acquisition, which has been approved by the Boards of Directors of both companies, will enable Campbell to expand its portfolio of leading snacking brands.
Snyder’s-Lance is a leading snacking company that manufactures and markets snack food throughout the United States. The company’s portfolio includes well-known brands such as Snyder’s of Hanover, Lance, Kettle Brand, KETTLE chips, Cape Cod, Snack Factory Pretzel Crisps, Pop Secret, Emerald and Late July.
Snyder’s-Lance has leading market positions in its core categories including pretzels, sandwich crackers, kettle chips, deli snacks and organic and natural tortilla chips.
According to Campbell’s, the acquisition combines the strengths of both organizations to drive sales growth and expand Campbell’s footprint in the US$89 billion US snacking market.
Snyder’s-Lance reported US$2.2 billion in net sales for the trailing 12 months ended Sept. 30, 2017. From calendar 2012-2016, Snyder’s-Lance net sales grew at an 11.5 percent CAGR; organic net sales outpaced category growth with a four percent CAGR.
The acquisition of Snyder’s-Lance will accelerate Campbell’s access to faster-growing distribution channels including the convenience and natural channels.
“The acquisition of Snyder’s-Lance will accelerate Campbell’s strategy and is in line with our purpose, ‘real food that matters for life’s moments.’ It will provide our consumers with an even greater variety of better-for-you snacks,” said Denise Morrison, Campbell’s President and CEO.
“The combination of Snyder’s-Lance brands with Pepperidge Farm, Arnott’s and Kelsen will create a diversified snacking leader, drive sales growth and create value for shareholders. This acquisition will dramatically transform Campbell, shifting our center of gravity and further diversifying our portfolio into the faster-growing snacking category.”
“We look forward to welcoming Snyder’s-Lance’s employees and their trusted family of leading brands to our company.”
Campbell's baked snacks product portfolio generated approximately US$2.5 billion in net sales in fiscal 2017. With the addition of Snyder’s-Lance’s complementary portfolio, snacking would represent approximately 46 percent of Campbell’s annual net sales (previously 31 percent) on a pro forma basis.
Campbell’s soup portfolio, including the acquisition of Pacific Foods, as reported in FoodIngredientsFirst in July, would represent approximately 27 percent of the company’s annual net sales.
“Following a thorough review process of strategic options, we believe this transaction maximizes value for our shareholders through an immediate and certain cash premium,” said Brian J. Driscoll, President and CEO of Snyder’s-Lance.
“The transaction also unlocks the value of our portfolio, reflecting the progress we have made planning and executing our transformation. We are excited to join Campbell and to continue to provide great products to our consumers with an uncompromising focus on ingredients, quality and taste.”
Creating a snacking leader
Snyder’s-Lance will become part of Campbell’s Global Biscuits and Snacks division, which includes the company’s Pepperidge Farm, Arnott’s and Kelsen businesses, and the simple meals and shelf-stable beverages business in Australia, Asia Pacific and Latin America. The division is led by Luca Mignini, President. It will combine Snyder’s-Lance’s portfolio with Campbell’s iconic snacking brands including Goldfish crackers, Tim Tam biscuits, Milano cookies and Kjeldsens butter cookies.
“Campbell’s expertise in brand-building, R&D, and supply chain and operations, coupled with Snyder’s-Lance’s well-known portfolio, distribution system and history of strong sales growth, will allow us to create a differentiated, branded snacking business with greater scale. The combined portfolio will be even more relevant to consumers who are increasingly seeking better-for-you snacks,” Mignini added.
Headquartered in Charlotte, North Carolina, Snyder’s-Lance has approximately 6,000 employees and operates 13 manufacturing centers throughout the US and UK.
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