Campbell Says Pacific Foods Lawsuit Puts Acquisition At Risk
Campbell Soup Company has said that it is continuing with the pending $700 million acquisition of Pacific Foods, but only if the latter company can resolve its legal issues.
Last month, the estate of a former Pacific Foods shareholder, Edward C. Lynch, filed a lawsuit against Pacific Foods, seeking over $250 million in damages.
Although Campbell was not named in the lawsuit, the company says that these issues create an impediment to closing its planned deal.
The soup company has notified Pacific Foods that it has 60 days to resolve the issues arising from the suit if the transaction is to be completed. After this period, Campbell has the option to extend or terminate the agreement.
"We remain enthusiastic about acquiring Pacific Foods, which has a track record of growth and strong health and well-being credentials," said Mark Alexander, president of Americas simple meals and beverages at Campbell.
"However, we will not complete the transaction unless the issues arising from this litigation are resolved to our satisfaction.”
In July, Campbell announced its intention to acquire organic soup and broth company Pacific Foods. The Oregon-based food company generated revenue of $218 million last year, and would help Campbell extend its range of natural products.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.