Pressure is rising for Campbell Soup sale, but heirs hold the key to any deal

  • Campbell Soup has announced it is doing a strategic review, renewing speculation it could put itself up for sale.
  • The announcement has also triggered speculation that activist investors could push for a sale.
  • The keys to change are held by the descendants of John T. Dorrance, inventor of the condensed soup formula, who together own 41 percent of the company.
  • Here are the subsets that comprise the 41 percent.

Every few decades the question again returns: Will Campbell Soup's major shareholders, descendants of John T. Dorrance, relinquish their hold on the soup empire and sell it.

That question has once again come up in the wake of the departure of Campbell CEO Denise Morrison and the soup company's announcement it is doing a review of its portfolio that keeps "everything" on the table." That speculation has been fanned by the stake that activist shareholder Third Point has taken in the company. Third Point has declined to comment to CNBC.

Campbell has declined to comment on this speculation. It plans to announce the results of its review at the end of August.

But any potential buyers or activists who want to agitate for a sale face a long road ahead. The Dorrance family is not a unified voting block. It is a number of different subsets, which have not always been aligned on whether the best option for the soup company is to sell or stay independent. Today, there remains disagreement, CNBC has reported.

Here, CNBC breaks down the lineage behind the Campbell Soup empire and whom an activist investor or potential buyer would need to persuade to make a deal or any other significant strategic change.

All roads start with John T. Dorrance, inventor of the condensed soup formula that served as the basis for the Campbell empire. Dorrance had been sole owner of Campbell when he passed in 1930. In a move that had longstanding impact, be bequeathed to his son Jack double the stake in the soup giant he left his daughters, according to Daniel Sidorick, author of Condensed Capitalism: Campbell Soup and the Pursuit of Cheap Production in the Twentieth Century.

As the Dorrance family multiplied over a number of different clans and surnames, control over the company stayed most tightly through Jack's immediate offspring.

Jack was chairman of the soup company from 1962 to 1984. When he passed in 1989, he left behind his wife, three children — John T. "Ippy" Dorrance, Mary Alice Malone and Bennett Dorrance — and eight grandchildren.

Two of Jack Dorrance's three children are Campbell's largest shareholders, holding a combined 33.1 percent of the company. The third sold down his position two decades ago.

  • Mary Alice Malone: Mary Alice is Campbell's largest shareholder, with a 17.7 percent stake in the company. She has been on the Campbell board since 1990. Malone also is president of Iron Spring Farm, a Pennsylvania-based breeding farm for horses.
  • Bennett Dorrance: Bennett has a 15.4 percent stake in the company and has been a board member since 1989. In 1984, he founded DMB Associates, a Phoenix-based real estate development firm.
  • Ippy Dorrance: Ippy in 1996 sold down $720 million worth of Campbell stock and moved to Ireland to allegedly avoid pursuant capital gains taxes, according to media reports at the time.

John T. Dorrance's descendants through his daughter Elinor hold a combined 7.9 percent of the company in the Campbell Soup voting trust. Within the trust, there are clans descend from each of Elinor's two daughters: Dorrance "Dodo" Hill. Hamilton and Hope H. van Beuren. Dodo passed last year.

The key members within the van Beuren clan are: Archbold van Beuren, who is its family trustee, and David Patterson, who is a non-family trustee (in other words, he is not a Dorrance descendant).

  • Archbold van Beuren: Archbold joined Campbell in 1983 and worked in various positions at the soup company until his retirement in 2009. That year, he joined the Campbell board, on which he continues sit.
  • David Patterson: David founded investment firm Brandywine Trust Company and is a former assistant U.S. attorney for the Southern District of New York. He served on the Campbell board from 2002 to 2009.

The Hamilton clan has not designated a family trustee. According to a 2017 13D filing, should there be a disagreement between the two clans "shares of the minority may be withdrawn" — or, in other words, they can take their shares out of the trust.

The voting trust decreased its position in Campbell in June 2017, according to Factset.

Cans of Campbell's soup are displayed on a shelf at Marinwood Market on November 21, 2017 in San Rafael, California. 
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Cans of Campbell's soup are displayed on a shelf at Marinwood Market on November 21, 2017 in San Rafael, California.