Snack Manufacturing Exit
The deal will mean that Campbell are no longer taking part in snack manufacturing activities in Europe. The sale of Kettle Foods also included Norwegian sister company Yellow Chips, thereby ridding them of all involvement in the niche.
It’s thought that all of the jobs currently held at Kettle Foods will remain in position, so there will be no need to panic for employees. However, it is possible that the new owners will seek to add new positions, which you can look out for with our job alerts here.
However, it doesn’t mean that Campbell are cutting ties with the Kettle brand entirely. They will still retain the brand and all aspects of the business in territories outside of Europe and the Middle East – including the US.
The transaction has not yet passed the relevant closing conditions, such as regulatory approvals and employee representative consultations, but it is expected that it will be closed in the first quarter of the 2020 financial year. There should not be any difficulties with going ahead, particularly as the company has only been under the Campbell umbrella for a short time. The Kettle family are used to moving around lately!
There has not been any particular discussion opened up on why Campbell chose this moment to make the sale, but an attractive offer from Valeo Foods may have something to do with the consideration.
Valeo Foods Step Forward
However, this is a big move for Valeo Foods. Chief Executive Seamus Kearney said: “The global snacking segment continues to grow and the proposed acquisition of Kettle Foods provides a great opportunity to further strengthen our expanding portfolio of international brands. This acquisition is consistent with our long-term goal of building a dynamic international portfolio of attractive, resilient and popular food brands that consumers love to enjoy.”
Around 492 employees will be joining Valeo Foods as part of this deal. This includes 411 production staff as well as 81 who are in administration positions, similar to those on offer here. The brand has considerable nationwide recognition, being a staple of supermarkets across the UK.
The news comes after several weeks of rumours and speculation about the deal. Campbell paid £20 million for Kettle Foods when it was purchased from PepsiCo less than a year ago, and experts had suggested the deal would be worth £50 million. This higher figure, then, comes as quite a surprise – and is a testament to Campbell’s ability to market a business.
Julian Wild, Corporate Finance Director at Rollits, has speculated that this move means Valeo are really looking at Kettle as a premium brand. They may even have plans to create a larger food group which could then be floated on the stock market.
“Kettle made a loss of over £4m on £51m turnover in the seven months to July 2018,” he pointed out. “But it is a £90m turnover business, with a good brand, and Valeo obviously thinks it can turn it around.”
All comments will remain as speculation only until the deal actually goes through, and we get to see what Valeo have in store. It certainly seems that they have big plans – if they didn’t, they might not be willing to spend as much on the brand. They definitely know something that we don’t, and it may well be an exciting moment to have that finally revealed next year.