Campbell Soup Company
) recently announced its plans to acquire Denmark-based Kelsen
Group A/S from Maj Invest - a private equity firm and several
other investors. The strategic acquisition will boost Campbell
Soup's growth prospects in the Chinese and Hong Kong market as
well as increase its global footprint.
The U.S.-based manufacturer of high-quality food and simple
meals has not disclosed the financial details of the transaction.
The company however expects the acquisition to be accretive at
the beginning of 2014.
Kelsen Group has a history of producing quality baked snacks
for over 75 years. Over the years, the company has expanded its
distribution network to Asia, South America, Africa, the Middle
East and the U.S. and presently operates in 85 countries. Given
its worldwide presence, we believe that Kelson Group will be a
strategic fit for Campbell Soup's long-term growth.
Moreover, the acquisition will facilitate Campbell Soup to
increase its market share in the baked snacks category,
particularly in China where Kelsen Group is the market leader in
the sweet biscuits category. Notably, this category's growth rate
in China exceeds that of the $60 billion global sweet biscuits
Kelsen Group's presence in the Chinese market goes back to
over 20 years, with its Kjeldsens brand being popular among
retailers and consumers in major cities. Significantly, over the
past 3 years, the brand's sales have grown up at a compounded
rate of over 28%.
Campbell Soup, which competes with
Flowers Foods, Inc
J&J Snack Foods Corp
), intends to operate Kelsen Group as a separate business under
its Campbell International division. In 2012, Kelsen Group's net
sales were $180 million, growing at a compound double-digit rate
In the past few months, Campbell Soup has been aggressively
focusing on strategic acquisitions to expand its international
presence as well as brand range. Earlier this month, following
the footsteps of
The Hain Celestial Group, Inc
), the company forayed into the premium organic baby food
category by acquiring Plum Organics. We believe that the
acquisition will enhance Campbell Soup's product categories and
enable it to reach out to a wider range of customers.
Campbell Soup, which currently carries a Zacks Rank #2 (Buy)
intends to boost its top line and increase returns on investment
through strategic measures. During fiscal 2012, the company made
significant progress in this direction, including stabilization
of the North American soup and simple meal business, overseas
expansion, and growth of healthy beverages and baked snacks
We believe that Campbell Soup's prudent investment and
strategic initiatives toward product innovation and brand
building will lead to an increase in its customer base and
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