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Campbell agrees to sell Arnott's, international operations to KKR for $2.2B


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Campbell agrees to sell Arnott's, international operations to KKR for $2.2B

Campbell Soup Co. signed an agreement to sell Australian cookie brand Arnott's Biscuits Ltd. and certain international operations to private equity company KKR & Co. for $2.2 billion, confirming an earlier report.

Under the deal, KKR will acquire Campbell's portfolio of simple meals and snacking brands in international markets including Australia, New Zealand, Indonesia, Malaysia, Singapore, Hong Kong and Japan. The companies have entered into a long-term licensing arrangement to give KKR exclusive rights to use brands such as Campbell's, Swanson, V8, Prego, Chunky and Campbell's Real Stock in these markets.

The New York-based PE firm will also acquire Campbell's manufacturing operations in Australia, Indonesia and Malaysia.

The deal is part of the Camden, N.J.-based food and beverage producer's push to raise $3 billion by selling its Campbell International and Campbell Fresh businesses to focus on its North America snacks, meals and beverage business and reduce debt.

Under the process, Campbell Fresh was sold in June for about $565 million, and Danish baked snacks unit Kelsen Group A/S was sold in July to a Belgian affiliate of confectioner Ferrero International SA for $300 million.

"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," said Campbell's President and CEO Mark Clouse said in an Aug. 2 statement.

Arnott's, which sells biscuits under brands like Tim Tam and Shapes, generates the majority of Campbell International's sales, the release noted.

David Lang, member at KKR, said the company will "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."

The deal, subject to customary closing conditions, is expected to close in the first half of fiscal 2020.

KKR was advised by Jefferies as its financial adviser and Simpson Thacher & Bartlett LLP and Allens as its legal counsels.

Campbell was advised by Centerview Partners, Goldman Sachs, Weil Gotshal & Manges LLP and King & Wood Mallesons.