Campbell Soup To Sell Two Business Units; Keeps Open Possibility Of Outright Sale Of Company

After a month-long review of its business and because of steady pressure from hedge fund investors, Campbell Soup Company has announced that it is putting up for sale its international and fresh, refrigerated foods business. it has also kept its options open for putting up on sale the entire business.

There has been no news about whether activist investor Dan Loeb, whose Third Point LLC hedge fund would be satisfied with the measures. The investor has been pressurizing the company for selling off the company to a rival soon after the hedge fund acquired a 5.65 per cent stake in the company on August 9. The justification given by Loeb is that a complete sell off is “the only justifiable outcome”.

Analysts said that this pressure on the company may be escalated by Loeb and he could also nominate a number of directors to the company in just the next few weeks for voting on the issue at Campbell’s annual meeting slated for later this year.

The board said that an outright sale of the company “remains open and committed to evaluating all strategic options to enhance value in the future”.

There was a drop of 4 per cent in the shares of the company in pre-market trading.

It has bene a challenge for the 149-year-old company to reduce costs of operations and to attract young consumers to its namesake soups and Pepperidge Farm cookies despite the company having revolutionized the home-cooking industry years ago with its easy-to-prepare soups and low-cost production techniques. There has been a fall by one third of its value over the last two years.

The company had recently announced that it was enhancing its cost savings target by $206 million to $1297 million by the end of fiscal 2022.

Under former Chief Executive Denise Morrison, the company followed a strategy of creating a diverse portfolio and a focus on health and well-being but the company has undergone a strategy shift in recent times with it withdrawing from smaller international and fresh food businesses.

Morrison stepped down abruptly in May after a string of poor results. That very same day that company announced that it would conduct a thorough review of its portfolio and appointed board member Keith McLoughlin as the company’s interim CEO.

Campbell could become a more lucrative target for takeover after it sells off the proposed units because it would then be left with its core business of soup and salty snacks businesses which have been the pillars of the company.

The two businesses that have been proposed for sale currently account for about a quarter of the total revenues of the company of at around $2.9 billion annually.

(Adapted from


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