Packaged food maker Campbell Soup has announced that it is set to acquire Sovos Brands for $2.33 billion (€2.12 billion).
Campbell will pay $23 per share for Sovos, a nearly 28% premium to the stock's last close.
Sovos' shares were trading at $22.48 while Campbell slipped 1.2% to $44.58 in early trade.
Deal-Making On The Increase
The global food and beverage industry has been a relatively bright spot for deal-making in recent quarters. Last month, Unilever said it would buy frozen yogurt brand Yasso in North America while Mars Inc agreed to buy Kevin's Natural Foods.
In May, Campbell Soup sold Emerald Nuts to Flagstone Foods for an undisclosed amount.
Campbell's meals and beverages division includes its ready-to-serve soups, tomato juice, gravies, and dinner sauces that are sold in the U.S. and Canada, and was its top revenue generator in 2022, according to its annual report.
Separately, Sovos reported a 16.3% jump in organic net sales for the second-quarter, driven by increased volumes despite higher pricing.
Acquisition 'Fits Perfectly'
“We’re thrilled to add the most compelling growth story in the food industry and welcome the talented employees who have built a nearly $1 billion portfolio,” said Campbell’s president and CEO Mark Clouse.
“This acquisition fits perfectly with and accelerates our strategy of focusing on one geography, two divisions and select key categories that we know well. Our focused strategy has enabled us to deliver strong results over the last five years, enhance our brands and capabilities, and generate strong cash flow to lower debt."
Clouse added that the Sovos Brands portfolio "strengthens and diversifies" Campbell's Meals & Beverages division.
Additional reporting by ESM
