Charlotte-based Snyder’s-Lance is selling itself to Campbell Soup for $4.87 billion.
In a statement Monday morning, the local snack maker said the all-cash deal has been approved by the directors of both companies. The deal is expected to close early in the second quarter of 2018.
Campbell Soup says buying Snyder’s-Lance will help transform itself into a more snack-focused company. The deal will also speed up its access to fast-growing sources of distribution, including convenience stores.
Snyder’s-Lance closed Monday at $50.04, up nearly 7 percent.
It is unclear whether the deal will result in any layoffs at the Snyder’s-Lance corporate headquarters in Ballantyne, where the company employs about 1,300. It’s also unclear whether Snyder’s-Lance will keep its name.
“Right now, we’re still very early in this process and certain decisions have yet to be made. In the meantime, it is business as usual for us,” Snyder’s-Lance spokesman Joey Shevlin told the Observer in an email Monday.
CEO Brian Driscoll said the Campbell Soup deal is the best option for Snyder’s-Lance shareholders.
“We’re confident this is the best way to unlock the value of our portfolio,” Driscoll said in a call with analysts Monday.
CNBC first reported earlier this month that Snyder’s-Lance was considering putting itself up for sale after an initial takeover approach from Campbell Soup. Driscoll said in Monday’s call that Campbell Soup first approached Snyder’s-Lance this summer.
Campbell Soup’s purchase price of $50 a share represents a premium of approximately 27 percent to Snyder's-Lance's closing stock price on Dec. 13, when news broke of a possible sale.
Snyder’s-Lance is the product of the 2010 merger of Pennsylvania-based Snyder’s of Hanover and Charlotte-based Lance. Over the last several years, the company has worked to boost its portfolio of “better-for-you products,” including through its $1.9 billion purchase of San Francisco-based Diamond Foods in March 2016.
Campbell Soup, based in New Jersey, already makes a number of well-known snacks, including Goldfish crackers and Milano cookies. When the Snyder’s-Lance deal closes, the company said, snacking will represent about 46 percent of Campbell’s annual net sales. Soup would represent about 27 percent.
Campbell Soup CEO Denise Morrison said in the analyst call Monday that the deal will “shift our center of gravity by diversifying our portfolio,” with more snacks, especially in the fast-growing “better-for-you” category.
“The addition of Snyder’s-Lance to Campbell will increase our ability to provide consumers with a wider variety of better-for-you snacks, including ones that are organic, gluten-free, non-GMO and provide other functional benefits,” Morrison said.
The sale of Snyder’s-Lance means Charlotte is losing the headquarters of another major publicly traded company. The company was No. 862 on the 2017 Forbes list of Fortune 1000 companies.
The deal with Campbell Soup comes amid other major changes at the company, which is known for snacks such as Snyder’s of Hanover pretzels, Lance peanut butter sandwich crackers and Pop Secret popcorn.
Last April, Carl Lee unexpectedly retired as CEO as the company said it faced “difficult challenges” that weighed on its profitability in the first quarter. Driscoll, the former CEO of Diamond Foods and a member of Snyder’s-Lance’s board, was named his successor in June. Following the leadership changes this summer, the company laid off dozens in its accounting department in Charlotte, opting to move the work to its Pennsylvania office.
Late last year, Snyder’s-Lance said it was selling Diamond Foods’ nut business to a private equity firm while keeping other Diamond products.
Also in 2016, the company announced plans to expand its Charlotte facility and add 130 new jobs over five years in exchange for about $1.6 million in incentives from the city of Charlotte and Mecklenburg County.
It is unclear whether the Campbell Soup deal affects the expansion plans.