Mondelez and Campbell’s Soup are locked in a stalemate over the sale of the soup firm’s Arnott’s cookie manufacturers, individuals accustomed to the matter inform CNBC.
The Oreo-owner submitted a ultimate provide a couple of weeks in the past for Campbell’s worldwide enterprise, together with Arnott’s, that was beneath Campbell’s roughly $Three-billion value expectation, the individuals mentioned. The 2 are presently at an deadlock.
It’s common for there to be final minute negotiations over value in deal talks, the individuals cautioned, and it’s due to this fact doable Mondelez and Campbell discover a decision.
There nonetheless stays a number of patrons for Arnott’s, together with a consortium backed by non-public fairness agency KKR, one of many individuals mentioned. It couldn’t be instantly decided what value these different patrons supplied, however non-public fairness corporations usually pay much less for acquisitions than company patrons that may benefit from synergies.
The stalemate places Campbell in a probably precarious place. It might be compelled to determine between promoting its Arnott’s enterprise beneath its desired value, or abandoning the sale course of altogether. Campbell put the unit and its contemporary meals manufacturers up on the market final yr, to assist pay down debt left within the wake its $6.2-billion buy of pretzel and chip firm Snyder’s-Lance. As a part of these efforts, it has additionally been promoting its Bolthouse Farms enterprise. That deal has likewise not but reached a conclusion.
The deadlock additionally throws into query an argument put ahead by activist fund Third Level, which beforehand acknowledged the corporate is best off cut up than collectively. Campbell in November reached a truce with the fund that included board turnover, after Third Level ran a marketing campaign that lambasted the soup firm for a string of quarterly misses.
In December, Campbell named new CEO Mark Clouse, who spent 20 years at Mondelez and its predecessor Kraft Meals.