Campbell Looks at Diversification Overseas (CPB, BX)

Campbell Soup Co. (NYSE: CPB) may be stealing a page from the global M&A playbook.  The Sunday Times reported that Campbell is considering making a 1.5 billion pound, roughly $2.3 billion today, for a bid that would break up United Biscuits in the United Kingdom.  The Sunday Times started the reports on this and it would mirror some other cross-border M&A in the food sector.

If this deal comes as the Times reported, then current ownership by Blackstone Group (NYSE: BX) and PAI Partners would effectively be selling off three quarters of that company.  The deal would leave the snack food operations under Blackstone and PAI.

Whether or not private equity groups would want to bust up the operation is not yet known.  Having interest is not the same as an owner saying they want to sell all or some operations at a certain price even if reports have indicated that to be the case.  The Times reported that the private equity groups were considering a break-up bid over just an all-or-none deal.

Original reports did put a price tag of around 2 billion pounds for he combined company earlier this summer.

Campbell could rather easily digest this acquisition with its $12.4 billion market cap.  At $36.64, its 52-week trading range is $30.63 to $37.50.

JON C. OGG