SYDNEY (Reuters) – KKR & Co (KKR.N) said it is buying Campbell Soup Co’s (CPB.N) Australian snacks unit Arnott’s that will give it ownership of top-selling biscuit brands such as Tim Tam, in a deal local media reported was worth $2.2 billion.
“I can confirm that KKR’s offer for Arnott’s was accepted by Campbell’s late last night,” an Australia-based spokeswoman for the New York-headquartered buyout firm said in an email, without specifying the price or commenting further.
The Australian Financial Review reported earlier without citing sources that the agreed sale price was $2.2 billion, less than the over $3 billion the seller reportedly wanted for the asset.
A Campbell Soup spokeswoman declined to comment on the report and said the unit had not yet been sold.
“The process to divest Arnott’s and the rest of our international operations is ongoing,” the spokeswoman for the U.S. food company said in a statement.
The sale marks the second change of offshore ownership of a large Australian food and drink brand in a week, after Belgian beer maker Anheuser-Busch InBev (ABI.BR) agreed to offload its Australian operations – with best-selling labels like VB and Carlton Draught – to Japan’s Asahi (2502.T) for $11 billion.
In 2016, Philippines-based Universal Robina Corp (URC.PS) paid $460 million for the maker of some of Australia’s best-known salty snacks, including CC’s, Kettle chips and Thins, from local interests.
Two years before that, Universal Robina paid $470 million for New Zealand’s top snack maker Griffin’s Foods Ltd from Australian private equity firm Pacific Equity Partners (PEP).
Companies like Arnott’s and the AB InBev unit “have a long history in Australia, and therefore have a degree of customer loyalty that can be harnessed to create value for these companies and expand their market share,” said Matthew Reeves, an analyst at IBISWorld.
“Being located in the Asia-Pacific, close to many developing economies, Australia is a springboard to expand into these countries,” he added.
Though Australians are used to Arnott’s being owned by foreign interests – Campbell bought it in 1997 – the sale gives KKR control of assets that have been synonymous with snacking in the 12th-largest economy for a century and a half. Arnott’s also makes Iced Vovos, SAO, Wagon Wheel, Monte Carlo and Mint Slice biscuits.
Australian media had reported PEP bid for Arnott’s. Mondelez (MDLZ.O) was also cited by Australian and other media as interested in the business, which the U.S. company has declined to comment on. Representatives for PEP declined to comment.
Campbell put its international unit and “fresh” units up for sale last August under pressure from investors to improve profitability and stock performance.
This month, it sold its Danish unit Kelsen Group to an affiliate of Nutella maker Ferrero SpA for $300 million.
Reporting by Byron Kaye and Paulina Duran; Editing by Stephen Coates and Muralikumar Anantharaman