Campbell Soup has entered into an agreement to acquire Sovos Brands for a total consideration of $2.7 billion, which will strengthen the soup maker's position in the frozen food industry. Under the terms of the agreement, Campbell will pay $23 per Sovos share, representing an approximate 28% premium to the last closing price. The transaction is expected to close by the end of December.

Founded in 1869, Campbell Soup is based in Camden, New Jersey. With more than 150 years of history, the company has won the favor of generations of consumers by offering a variety of affordable food and beverage options. In fiscal year 2022, it achieved sales of $8.6 billion. Sovos Brands is engaged in the food manufacturing business and offers a range of food products, including pasta sauces, dry pasta, soups, frozen entrees, frozen pizza, and yogurt. The company operates primarily in North America and includes popular brands such as Rao's and Michael Angelo's.

In the current environment, where many consumers are prioritizing basic purchases and cutting back on eating out at restaurants, ready to cook food manufacturers have seen a surge. To protect their profit margins from increased input costs, they have also made numerous price adjustments. Against this backdrop, Sovos recorded an impressive 16.3% increase in sales in the second quarter. Recent months have also seen significant M&A activity within the global food and beverage sector. In the previous month, Unilever announced its intention to acquire frozen yogurt brand Yasso in the North American market, while Mars reached an agreement to acquire Kevin's Natural Foods.

According to Bloomberg, this particular acquisition represents the most significant deal for Campbell since 2017, when it acquired snack food maker Snyder's Lance for approximately $4.9 billion.