Campbell Soup to Acquire Sovos Brands for $2.7 Billion in Deal
Campbell Soup has announced its plans to acquire Sovos Brands, the parent company of Rao’s pasta sauce, in a deal worth $2.7 billion. The agreement will see Campbell paying $23 per share for Sovos.
The acquisition aligns with Campbell Soup’s strategy of focusing on specific geographies, divisions, and key categories. Sovos Brands, which generated more than $837 million in annual adjusted net sales last year, is an ideal fit for Campbell’s growth plans.
“This acquisition fits perfectly with and accelerates our strategy of focusing on one geography, two divisions, and select key categories that we know well,” said Campbell Soup CEO Mark Clouse. “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.”
Campbell’s meals and beverages division, which includes its iconic tomato soup, gravies, and dinner sauces, was its top revenue generator in 2022, according to its annual report. The acquisition of Sovos Brands will further strengthen Campbell Soup’s position in the market.
The deal is expected to be finalized by the end of December, subject to Sovos Brands’ stockholder approval and regulatory approvals. Both companies’ boards of directors have already given their approval for the transaction.
In order to finance the acquisition, Campbell Soup plans to issue new debt. The company is confident that the acquisition of Sovos Brands will contribute to its growth and enhance its brand portfolio.
Reuters contributed to this report.