The Campbell Soup Company has announced a strategic acquisition aimed at enhancing its presence in the food and beverage industry. Specifically, Campbell’s has agreed to invest $286 million to acquire a 49% stake in La Regina, a company that manufactures Rao’s cooking sauces.
La Regina operates facilities in both Italy and Georgia, USA, producing the popular Rao’s tomato-based pasta sauces. This acquisition underscores Campbell’s commitment to expanding its brand portfolio and capitalizing on food and drink consumer trends that favor high-quality, premium products.
Mick Beekhuizen, CEO of Campbell’s, stated, “Our expanded partnership with La Regina strengthens our ability to deliver on the Rao’s growth opportunity.” The investment will occur in two installments: $146 million upon closing the deal and an additional $140 million one year later.
It’s noteworthy that the remaining 51% stake in La Regina is subject to call and put options between the parties involved, providing potential for further collaboration in the future. Campbell’s may also opt to fulfill part of the remaining payment in shares.
The completion of this minority stake deal is anticipated in the second half of Campbell’s fiscal year. This announcement comes alongside Campbell’s fiscal first-quarter financial results for the period ending November 2, where net sales experienced a 3% decline to $2.68 billion. However, on an organic basis, the decline was marginal at 1%, driven primarily by lower volume and mix.
Rao’s has shown sales gains during this quarter, although the company did not disclose detailed figures. Additionally, Campbell’s reported an 8% drop in EBIT, falling to $336 million, with adjusted earnings revealing an 11% decline. Net earnings also decreased by 11%, bringing the total to $194 million.
Beekhuizen remarked, “Our first-quarter performance was in line with our expectations, reflecting sharpened in-market execution in a dynamic operating environment.” He further emphasized that consumers are increasingly intentional in their shopping behaviors, particularly in at-home cooking, which continues to benefit Campbell’s brands within its Meals & Beverages portfolio, delivering quality, convenience, and value.
Even as the snacks division faces challenges amid category softness, Campbell’s remains optimistic about its brand relevance. Both segments reported a decline in net sales on an organic basis this quarter.
In a broader context, the food and drink business is evolving rapidly, and companies must adapt to emerging trends to stay competitive. The acquisition positions Campbell’s favorably amidst these shifts in consumer preferences
