The Campbell’s Company has struck a deal to buy almost half of the business that makes its Rao’s cooking sauces.
Campbell’s has agreed to pay a total of $286m for 49% of La Regina, which runs a facility in Italy and in the US state of Georgia. La Regina produces all of Rao’s tomato-based pasta sauces.
The transaction comes two years after Campbell’s announced the $2.7bn acquisition of US group Sovos Brands, which gave the soup giant ownership of Rao’s.
CEO Mick Beekhuizen said today (9 December): “Our expanded partnership with La Regina strengthens our ability to deliver on the Rao’s growth opportunity.”
The payment for the minority stake in La Regina will be made in two instalments – one of $146m and another of $140m on the first anniversary of the closing of the deal.
Campbell’s said the remaining 51% of La Regina is subject to call and put options held by either side.
Under the terms of the deal, Campbell’s can pay some of the price for the remaining stake in shares.
The deal for the minority stake is expected to be finalised in the second half of Campbell’s fiscal year, the company said.
Campbell’s announced the transaction alongside the publication of its fiscal first-quarter financial results, a three-month period that ran to 2 November.
Net sales fell 3% to $2.68bn. On an organic basis, net sales dipped 1%, “primarily driven by lower volume/mix”, Campbell’s said.
The company said Rao’s had seen sales “gains” in the first quarter, without providing further details.
EBIT dropped 8% to $336m. Adjusted for one-off items, EBIT slid 11%.
Net earnings decreased 11% to $194m.
Beekhuizen said: “Our first-quarter performance was in line with our expectations reflecting sharpened in-market execution in a dynamic operating environment. Consumers remain intentional in their shopping behaviours with at-home-cooking trends continuing to benefit our brands within our Meals & Beverages portfolio that deliver quality, convenience and value.”
He added: “While our snacks business continues to weather category softness, our brands remain highly relevant.”
Both divisions saw their net sales fall on an organic basis during the quarter.
