Campbell Soup close to selling European brands

Campbell Soup bought Bolthouse Farms, a producer of fresh juices, to gain foothold in supermarkets' refrigerated cases.
Campbell Soup bought Bolthouse Farms, a producer of fresh juices, to gain foothold in supermarkets' refrigerated cases.
Posted: August 14, 2013

Campbell Soup Co.'s announcement Monday that it is in final negotiations to sell its European business offers further evidence of chief executive Denise Morrison's resolve to shift the Camden company into faster-growing markets.

The soup and sauce brands in the proposed sale include Liebig and Royco in France, Erasco in Germany, BlÄ Band in Sweden, and Devos Lemmens and Royco in Belgium. The business generated about $530 million in revenue in fiscal 2012.

Campbell's total revenue last year was $7.7 billion.

The likely price was not disclosed. Company officials declined to comment.

Campbell, which employs 1,300 in Camden, publicized the offer from CVC Capital Partners because European law requires it to notify workers through works councils.

The completion of the sale is expected by the end of October, Campbell said.

CVC Capital said in its news release about the possible purchase of Campbell's "heritage consumer brands" that the European operations employ about 1,300. The deal includes four factories, in Belgium, France, Germany and Sweden.

"We see this transaction as another step in the company's move to de-emphasize its international soup operation and increase the focus on faster-growing brands, categories, and regions," Thilo Wrede, an equity analyst with Jeffries L.L.C., wrote in a note to investors Monday.

Since last August, Campbell has spent $2.15 billion on three acquisitions designed to boost its prospects in international markets outside Europe and with younger consumers, including babies.

The biggest acquisition in Campbell's history was the $1.55 billion purchase last August of Bolthouse Farms, a producer of carrots and fresh juices, to gain a new foothold in refrigerated supermarket cases, where sales are faster-growing than in the center-of-store aisles.

In June, Campbell paid $250 million for Plum Organics, a producer of food for babies and toddlers with $93 million in sales last year. Sales are projected to reach $115 million in the current fiscal year.

In an investor presentation last month, Morrison said Campbell's products for children had revenue growth of 7 percent last year - a significantly higher rate than the company's long-term goal of 3 percent to 4 percent.

Last week, Campbell completed its purchase of Kelsen Group A/S, a Danish cookie maker with a strong presence in China, for $350 million. Kelsen's revenue was $180 million last year and is expected to reach $200 million in Campbell's fiscal year ending next summer.

The proposed sale of Campbell Europe does not include Kelsen's European operations. Nor does it include Campbell's-branded products in the United Kingdom or the export of Pepperidge Farm products throughout Europe.

Campbell's has sometimes had a tough time in overseas markets, from Japan in the 1990s to Russia and China a decade later, two markets where the company tried to build a factory-made soup market from the ground up.

The company left Russia in 2011 after just a few years. It recently announced its Chinese soup business would refocus on products for the food-service market rather than for home cooks.

Campbell's shares gained 9 cents to close at $47.83 on the New York Stock Exchange.


Contact Harold Brubaker at 215-854-4651 or hbrubaker@phillynews.com.

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