The Campbell Soup Company has agreed to sell its European simple meals business to private equity firm CVC for €400m, but is retaining its largest and fastest-growing elements.
The deal covers Campbell’s national brands of soups, sauces and simple meals, including Liebig and Royco in France, Erasco in Germany, Blå Band in Sweden and Devos Lemmens and Royco in Belgium. It also includes four factories, in Puurs, Belgium; Le Pontet, France; Lubeck, Germany; and Karpalund, Sweden.
The businesses within the transaction recorded net sales of $530m (€398m) in 2012.
However, Campbell’s said it would hold on to recently-acquired Danish baked snacks maker Kelsen Group, and the company will continue to export Pepperidge Farm products throughout Europe and Campbell’s products in the United Kingdom and the Middle East and Africa.
Campbell’s president and CEO Denise Morrison said the sale was part of the company’s effort to focus investments on “building the brands that we believe we can grow around the world, strengthening our core and expanding our business in faster-growing geographies and categories.”
According to Canadean data, the UK soup market is set to grow faster than those in the countries included in the deal, with compound annual growth forecast at 4.2% over the next five years. Meanwhile Germany is set for 3% growth, France, 2.9%, Belgium 2.7% and Sweden just 1.8%.
As well as the fast-growing UK market, the soup market is expected to grow rapidly in the Middle East over the next five years. Canadean estimates that the UAE will grow its soup volume at a 6.3% CAGR from 2012 to 2017 and Turkey is expected to grow 8.2%.
Campbell expects the sale of its European operations to be completed in fourth quarter of the calendar year 2013, following European competition authority approval.