v3.25.2
Acquisition
 12 Months Ended
Aug. 03, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions Acquisition
On August 7, 2023, we entered into a merger agreement to acquire Sovos Brands, Inc. (Sovos Brands) for $23.00 per share. On March 12, 2024, we completed the acquisition. Sovos Brands' portfolio included a variety of pasta sauces, dry pasta, soups, frozen entrées, frozen pizza and yogurts sold in North America under the brand names Rao’s, Michael Angelo’s and noosa. See Note 4 for additional information on the noosa yoghurt business, which was sold on February 24, 2025. Total purchase consideration was $2.899 billion, which was determined as follows:
(Millions)
Cash consideration paid to Sovos Brands shareholders(1)
$2,307
Cash paid for share-based awards(2)
32
Cash consideration paid directly to shareholders$2,339
Cash paid for transaction costs of Sovos Brands 32
Repayment of Sovos Brands existing indebtedness and accrued interest486
Total cash consideration$2,857
Fair value of replacement share-based awards(3)
42
Total consideration$2,899
______________________________________
(1)    Consideration paid to Sovos Brands shareholders which reflects $23.00 per share.
(2)    Represents cash paid to equity award holders of Sovos Brands restricted stock and restricted stock unit awards attributable to pre-combination service. This excludes $3 million of cash paid that was recognized as expense.
(3)    We issued replacement equity awards in settlement of certain Sovos Brands equity awards that did not become vested in connection with the acquisition. The portion of fair value of the replacement awards attributable to pre-combination service was $42 million and is included in the purchase consideration. We recognized $26 million of expense related to accelerated vesting of certain replacement awards.
The cash portion of the acquisition was funded through a Delayed Draw Term Loan Credit Agreement (the 2024 DDTL Credit Agreement) of $2 billion and cash on hand. See Note 13 for additional information.
The table below presents the fair value that was allocated to acquired assets and assumed liabilities:
(Millions)Estimated Fair Value
Cash$240 
Accounts receivable96 
Inventories130 
Other current assets5 
Plant assets100 
Other intangible assets1,776 
Other assets16 
Total assets acquired$2,363
Accounts payable$96 
Accrued liabilities56 
Accrued income taxes1 
Long-term debt9 
Deferred taxes407 
Other liabilities11 
Total liabilities assumed$580 
Net assets acquired$1,783 
Goodwill1,116 
Total consideration$2,899 
The excess of the purchase price over the estimated fair values of identifiable net assets was recorded as $1.116 billion of goodwill. The goodwill is not deductible for tax purposes. The goodwill was primarily attributable to future growth
opportunities, anticipated synergies, and intangible assets that did not qualify for separate recognition. The goodwill is included in the Meals & Beverages segment.
The identifiable intangible assets of Sovos Brands consist of:
(Millions)Type Life in YearsValue
TrademarksNon-amortizableIndefinite$1,470 
Trademarks(1)
Amortizable2076 
Customer relationships(2)
Amortizable20to30230 
Total identifiable intangible assets$1,776 
_______________________________________
(1)Includes $74 million related to the noosa yoghurt business.
(2)Includes $18 million related to the noosa yoghurt business.
We incurred transaction costs and integration costs, including costs to achieve synergies, of $128 million associated with the Sovos Brands acquisition in 2024. Approximately $35 million represented transaction costs, including outside advisory costs, recorded in Other expenses / (income). In addition, we recognized $2 million in Interest expense related to financing fees associated with the 2024 DDTL Credit Agreement. Integration costs included expenses associated with accelerated vesting of replacement awards, severance and retention bonuses, amortization of the acquisition date fair value adjustment to inventories and other costs. Integration costs recognized in 2024 included the following:
•$18 million in Cost of products sold, $17 million of which related to the amortization of the acquisition date fair value adjustment to inventories;
•$3 million of Marketing and selling expenses;
•$47 million of Administrative expenses;
•$2 million of Research and development expenses; and
•$21 million of Restructuring charges to achieve synergies. See Note 8 for additional information.
For the period March 12, 2024 through July 28, 2024, the Sovos Brands acquisition contributed $423 million to Net sales and a loss of $84 million to Net earnings, including the effect of transaction and integration costs and interest expense on the debt to finance the acquisition.
The following unaudited summary information is presented on a consolidated pro forma basis as if the Sovos Brands acquisition had occurred on August 1, 2022:
(Millions)20242023
Net sales$10,354 $10,316 
Net earnings attributable to The Campbell's Company$592 $677 
The pro forma results are not necessarily indicative of the combined results had the Sovos Brands acquisition been completed on August 1, 2022, nor are they indicative of future combined results. The pro forma amounts include adjustments to interest expense for financing the acquisition, to amortization and depreciation expense based on the estimated fair value and useful lives of intangible assets and plant assets, and related tax effects. The pro forma results include adjustments to reflect amortization of the acquisition date fair value adjustment to inventories, expenses related to accelerated vesting of replacement awards and severance and retention bonuses as of August 1, 2022.