Campbell sells Arnott’s and fresh food business
Campbell Soup is selling its fresh food business, including Bolthouse Farms, as well as its Arnott’s and Kelsen brands, reports CNBC.com.
Campbell Soup revealed its plans to turn around the company after announcing a top-to-bottom strategic review in May. Activist shareholder Dan Loeb is calling for Campbell to sell itself.
The 149-year-old condensed-soup maker is unwinding efforts by former CEO Denise Morrison to branch into healthier and more fresh foods to double down on product lines it knows well — snacks, meals and beverages. Morrison’s surprise departure was announced in May after releasing what executives called “unacceptable” earnings.
The board considered a “full slate of strategic options, including optimizing the portfolio, divesting businesses, splitting the company, and pursuing a sale,” Campbell’s interim CEO Keith McLoughlin said in a statement. The board concluded that the “best path forward” is to “focus the company on two core businesses in the North American market,” he added.
Executives said the company was chasing too many initiatives at once and had little reason or justification to get into fresh food, where it had little experience and no reputation. The fresh food unit posted an operating loss of $7 million this quarter, still less than its $8 million loss the prior year.
Campbell has also been under pressure from activist shareholder Third Point, which has previously called a sale the only justifiable outcome of the review. When the company announced its review in May, it sparked speculation the process could end in a sale.
The sales of Campbell’s fresh food business will help pay down the debt left behind from its $6.1 billion acquisition of pretzel maker Snyder’s Lance earlier this year. The acquisition of Snyder’s more than tripled Campbell’s debt burden to $9.6 billion at the end of the most recent quarter.