Campbell and Sovos Brands Certify Substantial Compliance with Second Request from FTC; Begins the Start of 30-Day Waiting Period
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Insights
The certification of substantial compliance by Campbell Soup Company and Sovos Brands with the FTC's Second Request is a significant step towards the completion of their proposed acquisition. This development is crucial as it signals to investors that potential regulatory hurdles are being addressed and the transaction is on track to meet its targeted completion date. The 30-day waiting period that has commenced is a standard procedure in merger reviews, allowing the FTC to conduct a final assessment before the deal is allowed to proceed.
For stakeholders, this news suggests that the acquisition process is progressing smoothly and that the likelihood of a successful merger is high. This could have a positive effect on the stock prices of both companies, as market confidence in the deal's completion may increase. However, investors should also consider the risks associated with the integration of the two companies, such as potential cultural clashes, system incompatibilities and the challenge of achieving projected synergies.
Moreover, the statement by Campbell's CEO underscores the strategic intent behind the acquisition, highlighting the potential for growth and the creation of a more robust portfolio in the Meals & Beverages division. This suggests that Campbell is aiming to enhance its market position and competitive edge, which could lead to increased revenue and market share in the long term.
The acquisition of Sovos Brands by Campbell Soup Company is poised to reshape the competitive landscape within the food industry. By integrating Sovos Brands' portfolio, Campbell aims to bolster its Meals & Beverages division and complement its Snacks division. This strategic move is intended to position Campbell as a more growth-oriented entity in the food sector.
From a market perspective, the success of this acquisition could set a precedent for similar deals within the industry, potentially signaling a trend towards consolidation. Companies within the food industry may look to this transaction as a benchmark for their own growth strategies through mergers and acquisitions. The ability of Campbell to integrate Sovos Brands effectively will be closely watched by competitors and could influence future M&A activity.
Furthermore, the acquisition could lead to a diversification of Campbell's product offerings, potentially reducing risk by lessening reliance on a limited range of products. This could appeal to investors seeking stability and growth potential in their portfolios. The emphasis on becoming 'one of the most dependable, growth-oriented names in food' is a clear message to the market about Campbell's future direction and ambition.
The FTC's Second Request is a critical juncture in the regulatory review process of mergers and acquisitions, designed to ensure that such transactions do not harm competition. The certification of substantial compliance by Campbell and Sovos Brands indicates that they have provided the necessary information for the FTC to evaluate the competitive implications of the proposed acquisition. The 30-day waiting period is a mandatory phase during which the FTC can seek additional information, challenge the merger, or allow it to proceed without further action.
For businesses and investors, the successful navigation of this regulatory step without immediate legal challenges is a positive sign. It suggests that the companies have been proactive in addressing antitrust concerns and are likely to have developed strategies to mitigate potential regulatory objections. However, it is essential to remain aware of the possibility of last-minute complications that could arise from the FTC or other regulatory bodies, which could delay or even prevent the transaction from being finalized as planned.
It's also important to note that the completion of the transaction is still subject to the satisfaction or waiver of customary closing conditions. These conditions often include further regulatory approvals, the absence of legal impediments and other material adverse changes. Investors should be mindful of these contingencies as they could influence the final outcome of the acquisition.
The certification of substantial compliance triggers the start of a 30-day waiting period which is expected to expire on March 11, 2024, after which the sale can be finalized. Subject to the satisfaction or waiver of customary closing conditions, the companies expect to complete the transaction within days of the March 11, 2024 expiration date.
“We’re excited to be one step closer to completing the acquisition and welcoming the talented Sovos Brands employees to Campbell’s team,” said Campbell’s President and CEO Mark Clouse. “The Sovos Brands portfolio strengthens our Meals & Beverages division, and paired with our fast-growing Snacks division, will create one of the best portfolios in the industry and make Campbell one of the most dependable, growth-oriented names in food.”
“We are delighted to reach this critically important milestone in the completion of the acquisition. We remain highly confident in Campbell’s ability to continue bringing our products to more households and further building on our track record as one of the fastest growing food companies of scale in the United States,” commented Todd Lachman, Founder and Chief Executive Officer of Sovos Brands, Inc.
About Campbell
For more than 150 years, Campbell (NYSE:CPB) has been connecting people through food they love. Generations of consumers have trusted us to provide delicious and affordable food and beverages. Headquartered in
About Sovos Brands, Inc.
Sovos Brands, Inc. is a consumer-packaged food company focused on building disruptive growth brands that bring today’s consumers great tasting food that fits the way they live. The company’s product offerings include a variety of pasta sauces, dry pasta, soups, frozen entrées, frozen pizza and yogurts, all of which are sold in
Forward-Looking Statements
Certain statements in this press release regarding the proposed transaction, including any statements regarding the expected timetable for completing the proposed transaction, benefits of the proposed transaction, future opportunities, future financial performance and any other statements regarding future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are “forward-looking” statements made within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “aim,” “anticipate,” “believe,” “could,” “ensure,” “estimate,” “expect,” “forecasts,” “if,” “intend,” “likely” “may,” “might,” “outlook,” “plan,” “positioned,” “potential,” “predict,” “probable,” “project,” “should,” “strategy,” “target,” “will,” “would,” and similar expressions, and the negative thereof, are intended to identify forward-looking statements.
All forward-looking information is subject to numerous risks and uncertainties, many of which are beyond the control of Sovos Brands or Campbell, that could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to:
- the conditions to the completion of the proposed transaction may not be satisfied or that the closing of the proposed transaction might otherwise not occur;
- the timing to consummate the proposed transaction;
- long-term financing for the proposed transaction may not be obtained by Campbell on favorable terms, or at all;
- the risk that the cost savings and any other synergies from the proposed transaction may not be fully realized by Campbell or may take longer or cost more to be realized than expected, including that the Sovos Brands transaction may not be accretive to Campbell within the expected timeframe or the extent anticipated;
- completing the proposed transaction may distract the management of Campbell and Sovos Brands from other important matters;
- the risks related to the availability of, and cost inflation in, supply chain inputs, including labor, raw materials, commodities, packaging and transportation;
- the pendency of the proposed transaction may have an adverse impact on the ability of Sovos Brands to retain third-party relationships and related talent;
- Campbell’s ability to execute on and realize the expected benefits from its strategy, including growing sales in snacks and growing/maintaining its market share position in soup;
- the impact of strong competitive responses to Campbell’s efforts to leverage its brand power with product innovation, promotional programs and new advertising; the risks associated with trade and consumer acceptance of product improvements, shelving initiatives, new products and pricing and promotional strategies;
- the ability to realize projected cost savings and benefits from cost savings initiatives and the integration of recent acquisitions;
- disruptions in or inefficiencies to Campbell’s or Sovos Brands’ supply chain and/or operations, including reliance on key supplier relationships;
- the risks related to the effectiveness of Campbell’s hedging activities and Campbell’s ability to respond to volatility in commodity prices;
- Campbell’s ability to manage changes to its organizational structure and/or business processes, including selling, distribution, manufacturing and information management systems or processes; changes in consumer demand for Campbell’s and Sovos Brands’ products and favorable perception of such brands;
- changing inventory management practices by certain of Campbell’s and Sovos Brands’ key customers;
- a changing customer landscape, with value and e-commerce retailers expanding their market presence, while certain of the Campbell’s key customers maintain significance to Campbell’s business; product quality and safety issues, including recalls and product liabilities;
- the possible disruption to the independent contractor distribution models used by certain of Campbell’s businesses, including as a result of litigation or regulatory actions affecting their independent contractor classification;
- the uncertainties of litigation and regulatory actions against Campbell’s or Sovos Brands;
- the costs, disruption and diversion of management’s attention associated with activist investors;
- a disruption, failure or security breach of Campbell’s, Campbell’s vendors', Sovos Brands’ or Sovos Brands’ vendors information technology systems, including ransomware attacks;
- impairment to goodwill or other intangible assets;
- Campbell’s and Sovos Brands’ ability to protect their respective intellectual property rights;
- increased liabilities and costs related to Campbell’s defined benefit pension plans;
- Campbell’s and Sovos Brands’ ability to attract and retain key talent and other employees, which might require Campbell or Sovos Brands to use more expensive or less effective resources to support their respective businesses;
- goals and initiatives related to, and the impacts of, climate change, including weather-related events;
- negative changes and volatility in financial and credit markets,
- deteriorating economic conditions and other external factors, including changes in laws and regulations; and
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unforeseen business disruptions or other impacts due to political instability, civil disobedience, terrorism, armed hostilities (including the ongoing conflict between
Russia andUkraine and inIsrael andGaza ), extreme weather conditions, natural disasters, other pandemics or other calamities
Additional information concerning these and other risk factors can be found in Campbell’s and Sovos Brands filings with the SEC and available through the SEC’s Electronic Data Gathering and Analysis Retrieval system at http://www.sec.gov, including Campbell’s and Sovos Brands' most recent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
The discussion of uncertainties is by no means exhaustive but is designed to highlight important factors that may impact the outlook of Campbell and Sovos Brands. Campbell and Sovos Brands each disclaim any obligation or intent to update the forward-looking statements in order to reflect events or circumstances after the date of this release except as required by law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240213296929/en/
Campbell Soup Company
Investors
Rebecca_gardy@campbells.com
Media
James_Regan@campbells.com
Sovos Brands, Inc.
Investors
Joshua Levine
IR@sovosbrands.com
Media
Lauren Armstrong
media@sovosbrands.com
Source: Campbell Soup Company
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