Campbell Soup will pursue the divestiture of its Campbell Fresh and Campbell International units, the latter of which includes Australian snack firm Arnott’s and Danish biscuit manufacturer Kelsen Group, the company has confirmed.
But it has resisted calls from activist investors Third Point, which earlier this month called on Campbell’s to sell up. Third Point also increased its stake in the New Jersey-based food producer to 5.65% and attacked what it described as “years of abysmal oversight” and “dismal operating performance”.
Today’s announcement confirms suggestions that Campbell’s had opted not to pursue an outright sale.
Instead, it will focus on its Campbell Snacks and Campbell Meals and Beverages divisions in North America. As a result, the company has raised its overall cost savings target to $945 million, including Snyder’s-Lance savings as well as $150 million in “new actions”.
Campbell’s interim president and CEO Keith McLoughlin said: “Campbell’s board of directors considered a full slate of strategic options, including optimising the portfolio, divesting businesses, splitting the company, and pursuing a sale. 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. Importantly, the board remains open and committed to evaluating all strategic options to enhance value in the future.
“Our plan will build upon our existing strengths. Our new leadership team will concentrate on significantly improving operational discipline through a rigorous management model that aligns the enterprise from strategy through execution.
“We are moving forward with a sense of urgency to complete these changes in fiscal 2019, setting the foundation for sustainable, profitable growth in fiscal 2020 and beyond. The board and management team are committed to deleveraging the company, retaining our investment grade credit rating and maintaining our dividend. We will pursue further actions in addition to those announced today to optimise our portfolio and performance.”
The divested units include Australian snack food manufacturer Arnott’s Biscuits. The company, which has been under Campbell’s ownership since 1997, owns a number of biscuit brands including the iconic TimTam brand – as well as Vita-Weat and Milk Arrowroot.
Campbell’s will also offload the Kelsen Group, a Danish biscuit manufacturer best known for its large tins of biscuits under the Kjeldsens and Royal Dansk brands. Traditionally bought as gifts at Christmas and other seasonal occasions, both brands are seen as quite old-fashioned but are instantly recognisable across much of Europe.
The company has also reported its full-year performance, which includes net sales 10% higher thanks to recent acquisitions.
© FoodBev Media Ltd 2020