Campbell Soup Co. plans to sell its international and fresh foods operations, leaving open the possibility to sell the entire company, it announced Thursday.
The Camden-based company said it plans to have everything settled by July of next year, following a months-long review from a hedge fund pushing for a full sale. Third Point LLC, which owns a 5.56 percent of Campbell, said “the only justifiable outcome of the strategic review is for (Campbell) to be sold to a strategic buyer.”
Campbell International is comprised of Arnott’s and the Kelsen Group, along with manufacturing operations in Indonesia and Malaysia, and its businesses in Hong Kong and Japan. Campbell Fresh consists of Bolthouse Farms, Garden Fresh Gourmet and its refridgerated soup business.
Fiscal 2018 net sales of the businesses hit $2.1 billion, it said. Proceeds from the divestitures will be used to reduce debt, the company said.
Campbell’s interim CEO and President Keith McLoughlin said the company’s board of directors considers all options with the sales and concluded that “the best path forward to drive shareholder value is to focus the company on two core businesses in the North American market with a proven consumer packaged goods business model.”
McLoughlin said the plan is to build upon the company’s existing strengths, including its new leadership team and the growth of its Snacks and Meals and Beverages portfolios in North America.
“We are moving forward with a sense of urgency to complete these changes in fiscal 2019, setting the foundation for sustainable, profitable growth in fiscal 2020 and beyond. The board and management team are committed to deleveraging the company, retaining our investment grade credit rating and maintaining our dividend. We will pursue further actions in addition to those announced today to optimize our portfolio and performance.”
As a result of the refocus, Campbell said it is upping its cost savings target by $150 million. Combined, the new programs will bring the company’s total cost savings target to $945 million by the end of 2022.
“Simply put, we lost focus,” McLoughlin said on a conference call Thursday. “We lost focus strategically. We had too many initiatives that made the company unnecessarily complex. We were in the food business and the (agriculture) business; we had growth businesses and we had cash businesses; we were focused on startup businesses and venture capital investing.”