Campbell Soup Company has said that its Australian subsidiary, Arnott's Biscuits Holdings, has agreed to make a cash offer to buy outright Snack Foods, a leader in the Australian salty snack category.
The acquisition will be in the form of an all-cash tender offer, and the total consideration for the shares would be approximately A$255 million (€145m).
The Board of Directors of Snack Foods has recommended that its shareholders accept the offer. In addition, Snack Foods Limited's largest shareholder, Thorney Holdings, has granted Arnott's an option on up to approximately 20 per cent of Snack Foods's shares. Arnott's offer will be subject to a number of conditions, including the approval of Australian antitrust and foreign investment authorities.
Snack Foods had approximately US$125 million in sales in 2001, and over the past two years its sales have grown an average of 8 per cent annually. Arnott's, the biscuit market leader in Australia, entered the salty snack category in 1996 with the acquisition of the Kettle Chip brand.
With the addition of Snack Foods's brands in the potato chip, corn chip and other snack segments of the salty snack market, Arnott's will be the number two producer in the Australian salty snack market, which has been growing at an annual rate of 7.5 per cent over the past three years.
"This acquisition is consistent with our transformation plan strategy to strengthen our portfolio for predictable volume and profit growth," said Douglas R. Conant, Campbell's president and chief executive officer. "Snack Foods has strong brands, which will complement our current franchise and extend our presence in the Australian biscuit and snacking market."
Snack Foods currently employs 1,100 workers in five factories located in each of the Australian Territories. Arnott's will resume responsibility for the management of the production facilities when the deal is completed.