Shares of Campbell Soup and Snyder's-Lance have risen after a report that the soup company is in advanced talks to buy the pretzel maker.
In Snyder's, Campbell is getting is a hot snack food company whose sales have grown almost 12% a year over the past five years.
CNBC reported that Campbell's generated roughly 31 percent of its sales in fiscal 2017 through baked snack sales.
Snyder's-Lance will become part of Campbell's Global Biscuits and Snacks division, which includes the company's Pepperidge Farm, Arnott's and Kelsen businesses, and the simple meals and shelf-stable beverages business in Australia, Asia Pacific and Latin America. Snyder's-Lance makes snacks such as Snyder's of Hanover pretzels, Cape Cod and Kettle potato chips and Pop Secret popcorn.
"The acquisition will help us accelerate our efforts to expand into faster-growing distribution channels", including convenience stores, Morrison said. But snacks now account for just a third of Campbell's sales.
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"The combination of Snyder's-Lance brands with Pepperidge Farm, Arnott's and Kelsen will create a diversified snacking leader, drive sales growth and create value for shareholders".
The acquisition is expected to close in Q2, 2018.
Campbell expects to find $170 million in cost savings to reduce the cost of the transaction, said Anthony DiSilvestro, the firm's chief financial officer.
"A lot of those companies don't have, or haven't taken advantage of, all of the nooks and crannies of the tax code", said Jason Pride, director of investment strategy at Glenmede.
Campbell also would end a program to buy back its shares, and would apply any savings from tax-code changes toward reducing its debt, DiSilvestro said.
The deal, Campbell's sixth in the last five years, stands in sharp contrast to most of its other recent acquisitions.