Campbell Soup in advanced talks to acquire Snyder's-Lance
- Campbell is in advanced talks to acquire Snyder's-Lance in a deal that could be announced as soon next week, sources tell CNBC.
- A potential deal would be Campbell's largest yet, amid industry changes and consolidation.
- It remains possible that deal talks could be delayed or fall apart, sources tell CNBC.
Campbell Soup is in advanced talks to acquire snacks company Snyder's-Lance, owner of Cape Cod potato chips and Snyder's pretzels, sources familiar with the situation said on Friday. The deal, which would be Campbell's largest yet, could be announced as soon as next week, they added.
The deal could value Snyder's at roughly $50 a share, one of the sources said.
There was another company in talks with Snyder's, though it is unclear if that company is still engaged, the source added.
The sources, who requested anonymity because the information is confidential, said it remains possible the deal is delayed or falls apart. A representative for Campbell declined to comment. Snyder's-Lance did not immediately respond to requests for comment.
Deal talks were first reported by CNBC on Thursday.
Acquiring Snyder's would be 148-year-old Campbell's boldest move in a series of smaller steps to move beyond its core soup business. It would come as CEO Denise Morrison heads into her seventh year in the job.
Campbell acquired dressing, beverage and vegetable company Bolthouse Farms in 2012 for $1.55 billion. This month it completed its $700 million acquisition of organic broth and soup company Pacific Foods. Last year it joined the ballooning number of consumer packaged giants to launch a venture unit in hopes of keeping closer tabs on innovation.
Adding Snyder's snack brands like Diamond Foods and Pop Secret popcorn would broaden Campbell's Pepperidge Farm snack business and create a stronger foothold into convenience stores. Both moves appeal to the increasing number of people who eat and shop on the go.
Pressure for food industry consolidation is high. Beyond slowing sales, consumer giants are faced with increased competition from private label brands along with a new retail landscape that sees Amazon as an increasingly powerful player.
Snyder's-Lance was put together through a compilation of deals. Snyder's merged with Lance in 2010. The combined company bought Diamond Foods in 2016.
It has struggled recently though with operational challenges, including a more costly than expected integration of its Diamond acquisition.
Meanwhile, its "direct store delivery" model — in which it delivers directly to stores, rather than keeping products in warehouse — has proven costly and out of step with today's more popular warehouse model. Direct store delivery becomes more cost efficient as more products are added.
Earlier this year, Snyder's CEO Carl E. Lee, Jr. stepped down from the role after working at the company for 12 years. He was replaced by Brian Driscoll, former president and chief executive of Diamond Foods.