Mondelez at stalemate with Campbell over Arnott’s sale

Mondelez and Campbell’s Soup are locked in a stalemate over the sale of the soup company’s Arnott’s cookie brands, people familiar with the matter tell CNBC.

The Oreo-owner submitted a final offer a few weeks ago for Campbell’s international business, including Arnott’s, that was below Campbell’s roughly $3-billion price expectation, the people said. The two are currently at an impasse.

It is common for there to be last minute negotiations over price in deal talks, the people cautioned, and it is therefore possible Mondelez and Campbell find a resolution.

There still remains multiple buyers for Arnott’s, including a consortium backed by private equity firm KKR, one of the people said. It could not be immediately determined what price these other buyers offered, but private equity firms typically pay less for acquisitions than corporate buyers that can take advantage of synergies.

The stalemate puts Campbell in a potentially precarious position. It may be forced to decide between selling its Arnott’s business below its desired price, or abandoning the sale process altogether. Campbell put the unit and its fresh food brands up for sale last year, to help pay down debt left in the wake its $6.2-billion purchase of pretzel and chip company Snyder’s-Lance. As part of those efforts, it has also been selling its Bolthouse Farms business. That deal has likewise not yet reached a conclusion.

The impasse also throws into question an argument put forward by activist fund Third Point, which previously stated the company is better off split than together. Campbell in November reached a truce

with the fund that included board turnover, after Third Point ran a campaign that lambasted the soup company for a string of quarterly misses.

In December, Campbell named new CEO Mark Clouse, who spent 20 years at Mondelez and its predecessor Kraft Foods.

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