US raiding the biscuit tin

Campbell Soup in reported $3.1b Arnott’s sale

US FOOD giant Campbell Soup has reportedly offloaded iconic Australian biscuit company Arnott’s as part of the $US2.2 billion ($3.14 billion) sale of its international arm.

Campbell’s had flagged selling the Tim Tams, Mint Slice and Monte Carlo maker in August last year, 21 years after purchasing the brand.

Widespread media reports yesterday said that Campbell’s had struck a deal overnight with fellow US firm Kohlberg Kravis Roberts for the Campbell International division, which includes the biscuit manufacturer and all Campbell’s soup sold in Australia.

A Campbell Soup spokeswoman yesterday said the process to divest Arnott’s was ongoing and the company had not been sold.

“We do not comment on rumour and speculation,” the spokeswoman said.

Sydney-based Arnott’s employs 2400 people across all states and territories, as well as several thousand people across the Asia Pacific region.

Its portfolio of brands includes household names such as Shapes, Iced VoVo, SAO, Vita-Weat, Wagon Wheels, Salada and Tiny Teddy.

Arnott’s was bought by Campbell’s in 1997 in a deal that caused a stir among biscuit lovers Down Under.

The two entities reportedly in the running for Campbell International were Australian private equity group Pacific Equity Partners and KKR.

Arnott’s started life 172 years ago when a Scottish baker, William Arnott, started making biscuits for long-haul sea voyages in a factory in Newcastle.

In 1882 the company got its big break with the development of the Milk Arrowroot biscuit.

The company teamed up with Campbell’s in 1970 in the face of increasing international competition from players such as US food conglomerate Nabisco.

The difficult economic conditions in 1997 led to Campbell’s taking full control.

KKR was mentioned last year as a potential buyer when Campbell’s signalled its intention to offload its international operations.

KKR has a history of buying assets and onselling them for a profit. In 1988 it organised a debt-fuelled buyout of Nabisco for $44 billion, which at the time was the largest leveraged buyout in history.

The move was lucrative for the investors, who made plenty of money.

It also gave private equity an increased public profile when the book and movie Barbarians at the Gate: The Fall of RJR Nabisco was released.