The Campbell Soup Company has said that proceeds from the sale of its UK and Irish businesses to the UK’s Premier Foods, which was completed yesterday (15 August), will primarily be used to fund a stock repurchase scheme.
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The board has authorised using approximately US$620m of the net proceeds to buy back Campbell shares. These purchases are expected to be completed in fiscal 2007 and are in addition to the three-year $600m share repurchase plan previously announced.
The Campbell businesses acquired by Premier included the Homepride, OXO, Batchelors, Erin and Fray Bentos brands and four manufacturing sites. The total sale price was $870m.
Douglas R. Conant, Campbell’s president and CEO, said: “The sale of these businesses will better enable Campbell to focus on building our businesses within the simple meals and baked snacks categories in markets with the greatest potential for growth. Our decision to utilise a majority of the proceeds to purchase shares reflects the confidence we have in our long-term growth prospects and is consistent with our commitment to deliver strong investor returns.”
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