Arnott's snacks change hands

Campbell Soup Co and its Australian subsidiary Arnott's have decided to exit the local salty snack foods business, selling the division it bought in an agreed takeover six years ago.

Campbell has agreed to sell most of the Snack Brands business it bought in late 2002 for $250 million to the principals of its local rival, the privately owned The Real McCoy, and other unnamed investors.

Details of the transaction have not been released, but it is not thought it will be making a profit on the transaction. Indeed, Campbell is taking a $230 million hit to its profits from the impacts of this sale, along with the associated closure of its private label biscuit and industrial chocolate production in Miranda, and the closure of a food plant in Canada.

Campbell Soup used UBS as its financial advisor, while The Real McCoy used PwC Transaction Services. The brands included in the sale include Kettle, Cheezels, Thins, Tasty Jacks and French Fries, which will be merged with the Real McCoy brands that include Burgerman, Jumpys and Nature's Earth Vegetable Crisps.

It appears to be the biggest acquisition so far for The Real McCoy, which has focused mostly on organic growth since being founded 15 years ago. It intends to use the combined business to gain wider distribution for some of its more popular brands.