Following the Aug 12 negotiations and a binding agreement with
private equity firm, CVC Capital Partners,
Campbell Soup Company
) has now outlined definitive terms to sell its European simple
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The company has decided to divest its selected sauces, soups and
simple meals in Europe to CVC Capital for 400 million euros ($542
million). The brands to be sold include Erasco in Germany, Liebig
and Royco in France, Blå Band in Sweden and Devos Lemmens and
Royco in Belgium. The 4 production plants of the company located
in France (Le Pontet), Sweden (Karpalund), Belgium (Puurs) and
Germany (Lubeck) also form a part of the divestiture.
Additionally, the Camden, N.J.-based manufacturer of high-quality
food and simple meals has made it clear that this particular
transaction will not involve the company's export business of
Pepperidge Farm products throughout Europe and its businesses in
the U.K., the Middle East as well as Africa. Further,
Denmark-based Kelsen Group A/S, which was recently acquired by
Campbell Soup, will continue with its regular operations.
This divestment is the company's latest effort to move away from
its troubled canned soup business and to enhance its presence in
the packaged fresh food market. The company intends to use the
proceeds from the sale to lower its debt burden and meet other
general capital requirements.
The transaction is likely to close in the fourth quarter of
calendar 2013, subject to the approval of the concerned European
competition law authorities. The operations that are to be
offloaded generated annual revenue of about $530 million in
Allen & Overy LLP will act as the financial advisor to
Campbell Soup while CVC Capital will have Leopold Capital
), Cleary Gottlieb Steen & Hamilton LLP and Ernst & Young
as its financial advisors.
Campbell Soup, which currently carries a Zacks Rank #4 (Sell),
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
businesses. We believe that Campbell Soup's prudent investment
and strategic initiatives toward product innovation and brand
building will strengthen its customer base and profitability.
Other well-performing stocks in the retail space include
Pinnacle Foods Inc.
Green Mountain Coffee Roasters Inc.
). Both of them carry a Zacks Rank #1(Strong Buy).