Campbell Soup to buy Pretzel owner in $4.87bn deal, shares rise

Campbell Soup to buy Pretzel owner in $4.87bn deal, shares rise

CEO Brian Driscoll said the Campbell Soup deal is the best option for the Snyders'-Lance shareholders.

Soup sales have lagged, so Campbell announced on Monday that it's buying Snyder's-Lance for $50 a share in an all-cash deal valued at $4.9 billion. Besides its canned soups, it makes Goldfish crackers, V8 juices and Prego pasta sauces.

Snyder's brands include Snyder's of Hanover, Lance, Kettle Brand, KETTLE chips, Cape Cod, Snack Factory Pretzel Crisps and Pop Secret. Those were created to move Campbell into fresher-food categories seen by its leadership as more in line with today's consumers, though management frequently highlighted snacks as a target for expansion.

Campbell Soup says the acquisition of Snyder's-Lance will accelerate its access to quickly growing avenues for distributing its goods, including convenience stores. It is unclear if the Campbell Soup deal affects the expansion plans.




Campbell's has been broadening its brand in recent years.

Four percent is not bad, said Mitchell B. Pinheiro, who works in portfolio management and research at Costello Asset Management Inc.in Feasterville and has followed Campbell for many years.

Soup sales have fallen 9% since a year ago, the company reported in November. Campbell's share of the USA soup market has dropped seven percentage points over the last five years to 42%, according to research firm Euromonitor. Pepperidge Farm sales were up 3% last quarter during an otherwise lackluster summer. With the addition of Snyder's-Lance's complementary portfolio, snacking would represent approximately 46% of Campbell's annual net sales (previously 31%) on a pro forma basis. That has far outpaced the rest of the $89 billion US snack industry. This month it completed its $700 million acquisition of organic broth and soup company Pacific Foods.

Snyder's stock increased by 6.7 percent at Monday's premarket to $49.95 per share. Campbell ticked up 1%.

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