CAMDEN, N.J. — KKR & Co., Inc., a New York-based private equity business, has signed an agreement to acquire certain international operations of Campbell Soup Co., including the Arnott’s biscuits business in Australia and Asia Pacific, the simple meals and shelf-stable beverages business in Australia and Asia Pacific, and the business in Latin America. Arnott’s sells cookies and crackers under Arnott’s and TimTam brands. The company has plants in Australia, New Zealand and Singapore.
The transaction is valued at $2.2 billion and will reduce the grain-based foods portfolio of Campbell Soup, the parent company of Pepperidge Farm and Snyder’s-Lance.
KKR emerged as the victorious bidder for the remaining assets in the International division of Campbell Soup in late July, beating out another private equity group, Pacific Equity Partners, Sydney, Australia. KKR said it is funding its investment in Campbell’s International business primarily through its Core Investments strategy, which represents capital targeting longer-term opportunities.
“Campbell International represents a unique portfolio of iconic brands that are known and loved by consumers in Australia and across the world,” said David Lang, member at KKR. “We are privileged and excited to have the opportunity to 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. This is a milestone investment for KKR, and we look forward to working closely with the Campbell International management team to seek out new and exciting opportunities.”
Acquired by Campbell Soup in 1997, Arnott’s is one of Australia’s most iconic brands. Arnott’s regional headquarters are based in Sydney with operations in Western Sydney, Brisbane, Adelaide in Australia and Bekasi, Indonesia. Arnott’s and Campbell’s International operations had combined net sales of approximately $885 million in the latest 12 months and employ approximately 3,800 people.
“This was a thorough and complex process in which we considered many options,” said Mark A. Clouse, president and chief executive officer of Campbell Soup. “Our approach has resulted in agreements that we believe generate the greatest value from our international assets. 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.”
Under the terms of the agreement, Campbell Soup and KKR have agreed to enter into a long-term licensing arrangement for the exclusive rights to use certain Campbell brands, including Campbell’s, Swanson, V8, Prego, Chunky and Campbell’s Real Stock, in Australia, New Zealand, Malaysia and other select markets in Asia, Europe, the Middle East and Africa.
In 2018, Campbell Soup generated a total of $622 million in sales in Australia of the company’s $8,685 million total. Countries other than the United States and Australia generated $1,031 million in sales in 2018.
The totals include $157 million in sales of Kelsen Group products, acquired by Campbell Soup in 2013. Kelsen, which operates plants in Denmark, South Africa, China, Hong Kong and the United States, manufactures cookies that are sold in 85 countries around the world. Earlier in July, it was announced that Kelsen would be acquired for $300 million by a holding company affiliated with the Ferrero Group.