Lawsuit puts Campbell’s acquisition of Pacific Foods on hold
The Campbell Soup $700 million acquisition of Pacific Foods of Oregon, which was announced on July 6, is on hold due to a lawsuit.
The Campbell Soup $700 million acquisition of Pacific Foods of Oregon, which was announced on July 6, is on hold due to a lawsuit. On August 21, the estate of a former Pacific Foods shareholder, Edward Lynch, filed a lawsuit against Pacific Foods, certain of its directors and others seeking more than $250 million in damages.
While Campbell is not named in the suit, the lawsuit creates an impediment to closing. On September 27, Campbell notified Pacific Foods that the company has 60 days under the terms of the agreement to resolve the issues arising from the suit if the transaction is to be completed. After the 60-day period, Campbell has the option to extend the cure period 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. However, we will not complete the transaction unless the issues arising from this litigation are resolved to our satisfaction,” said Mark Alexander, Campbell’s president, Americas simple meals and beverages.