Campbell Soup, Snyder's-Lance shares rise on deal report

Campbell Soup, Snyder's-Lance shares rise on deal report

Campbell Soup Co and Hershey Co on Monday unveiled deals totaling almost $6 billion to buy healthy packaged snacks makers, the latest example of big US food companies trying to cater to an increasing American preference for healthy foods.

Buying Snyder's-Lance will "dramatically transform Campbell, shifting our center of gravity", Campbell CEO Denise Morrison said in a statement. The deal is expected to close early in the second quarter 2018.

Hoping to grow its snacks business Campbell will pay Snyder's shareholders $50 per share in cash.

"We think the Snyder's-Lance deal represents crystalline logic", ConsumerEdge Research analyst Jonathan Feeney said in a note. Goldman Sachs & Co LLC advised Snyder's-Lance and Jenner & Block LLP gave legal counsel.

Shares of Snyder's-Lance opened at record high Monday.

Campbell Soup is hungry for pretzels, chips and popcorn.

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The Hanover, York County-based Snyder's of Hanover is one of the largest pretzel bakers in the nation.

CNBC reported that Campbell's generated roughly 31 percent of its sales in fiscal 2017 through baked snack sales. Over the last several years, the company has been working to boost its portfolio of "better-for-you products", including through its $1.9 billion purchase of San Francisco-based Diamond Foods in March 2016. Cloud services provider Akamai Technologies leaped after Elliott Management, led by activist investor Paul Singer, disclosed a 6.5 percent stake in the company and said it wants to discuss changes to the company's business and other areas.

The company, which rejected a $23 billion bid from Oreo cookie owner Mondelez International Inc in June last year, said it expects to save $20 million over the next two years through the Amplify deal.

Soup sales have fallen 9% since a year ago, the company reported in November.

Late previous year, Snyder's-Lance said it was selling Diamond Foods' nut business to a private equity firm, while keeping other Diamond products. It is unclear if the Campbell Soup deal affects the expansion plans.

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