Campbell is acquiring the parent company of Rao’s for $2.7 billion

Campbell Soup Co. announced on Monday that it has entered into an agreement to acquire Sovos Brands, Inc., the parent company behind Rao’s, known for its pasta sauces.

The deal, which is subject to regulatory approval, is expected to close in December, and represents a $2.7 billion acquisition. It would be Campbell’s largest deal since the company announced it would acquire snack maker Snyder’s-Lance for $6 billion in 2017, according to Bloomberg. The iconic soup company has been based in Camden since its founding in 1869.

“The Sovos Brands portfolio strengthens and diversifies our Meals & Beverages division,” Mark Clouse, Campbell’s president and CEO, said in a press release.

Sovos Brands, headquartered in Louisville, Colo., also owns food brands Michael Angelo’s, which sells frozen Italian-style dinners, and noosa, a yogurt brand known for its flat and wide tubs of creamy yogurt with fruit purees.

The acquisition of Sovos Brands would expand Campbell’s line of frozen products as well as enlarge the company’s portfolio of pasta sauces. The company already owns sauce brands Prego and Pace, as well as the Pepperidge Farm brand, known for snack foods like Goldfish, a wide variety of cookies, and frozen puff pastries.

Campbell saw an increase in sales during the pandemic, and earlier this year announced it was expanding its headquarters in Camden to make room for 330 more employees. Last month, the company also invested $160 million to bolster Goldfish production, cranking out 1,500 goldfish a second, according to Bloomberg.

“As one of the most trusted and respected food companies in North America, I’m confident in Campbell’s ability to continue bringing our products to more households,” Todd Lachman, founder, president and CEO of Sovos Brands, said in a press release.

Prior to the announcement of the acquisition, Rao’s was one of Campbell’s competitors in the soup market. The company’s soups, from Italian wedding soup to vegetable minestrone, are sold in clear glass jars. In the past, the company’s marketing took a jab at Campbell, pointing out that the clear jars have nothing to hide. In the ad, one of the Rao’s soup jars is placed next to a series of cans in a timeline that dates back to the creation of condensed soup, which Campbell popularized.