Campbell Soup Co, the Camden, NJ-based food giant, has said that its Australian subsidiary, Arnott’s Biscuits Holdings, is to make a cash offer of A$2 (US$1.15) per share for all of the shares of Snack Foods Ltd, a leader in the Australian salty snack category.
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Under the terms of the offer, Snack Foods’ shareholders will also receive a dividend of A$0.025 per share, previously paid in October, from Snack Foods. The acquisition will be in the form of an all-cash tender offer, and the total consideration for the shares would be about A$255m.
Snack Foods’ board has unanimously recommended that its shareholders accept the offer. In addition, its largest shareholder, Thorney Holdings Pty Limited, has granted to Arnott’s an option on up to approximately 20% of Snack Foods’ shares. Arnott’s offer will be subject to a number of conditions, including the tender of at least 90% of the outstanding shares in the offer and the approval of Australian antitrust and foreign investment authorities.
Snack Foods had about US$125m in sales in 2001, and over the past two years its sales have grown an average of 8% annually. Arnott’s, the biscuit market leader in Australia, entered the salty snack category in 1996 with the acquisition of the “Kettle Chip” brand. With the addition of Snack Foods’s brands in the potato chip, corn chip and other snack segments of the salty snack market, Arnott’s will be the number two producer in the Australian salty snack market, which has been growing at an annual rate of 7.5% over the past three years.
“This acquisition is consistent with our transformation plan strategy to strengthen our portfolio for predictable volume and profit growth,” said Douglas R. Conant, Campbell’s president and CEO. “Snack Foods has strong brands, which will complement our current franchise and extend our presence in the Australian biscuit and snacking market.”
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