Campbell Soup Co has set out plans to stabilise its business through the sale of its fresh produce and international arms.
The food group stopped short of announcing a complete sale, as had been sought by shareholder Daniel Loeb and his Third Point investment group, following a months-long review.
It is not clear if this will appease the activist investor, but the company has left open the possibility of a complete sale.
The turnaround plan will see the New-York listed business divest in its overseas and fresh food business, which together make around a quarter of revenues.
It will thus focus on the meal and beverage part of the business, which includes it eponymous tinned soup, and its fast-growing snack arm.
The sale plans came as it announced that organic sales dropped 2% for the year ending 29 July 2018, although total sales rose 10% to $8.7bn due to the impact of recent acquisitions, including Kettle Chips owner Snyder’s Lance and Pacific Foods.
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In the fourth quarter, these deals pushed sales up 36% to $2.2bn, although organic sales fell 3%, driven largely by falls in ready meals and beverages.
The shake up comes three months after Denise Morrison resigned as company CEO, after shares dived upon the announcement of a profit warning with Campbell’s third quarter results.
“Campbell’s Board of Directors considered a full slate of strategic options, including optimizing the portfolio, divesting businesses, splitting the company, and pursuing a sale,” said Campbell’s interim president and CEO Keith McLoughlin.
“The Board concluded that, at this time, the best path forward to drive shareholder value is to focus the company on two core businesses in the North American market with a proven consumer packaged goods business model.
“We are moving forward with a sense of urgency to complete these changes in fiscal 2019, setting the foundation for sustainable, profitable growth in fiscal 2020 and beyond.”
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