Arnott’s biscuits eaten up by KKR

Arnott’s is to soon be owned by KKR after it agreed to pay $US2.2 billion ($3.15bn) for the biscuits and snack-maker.

Arnott’s Biscuits is being passed to private equity firm KKR.

One of Wall Street’s most powerful and feared corporate leviathans, investor KKR, is set to grab control of the nation’s Tim Tams, Mint Slices and Scotch Finger biscuits as the equity raider that was once nicknamed the “Barbarians at the Gate” claims Australia’s Arnott’s as its latest spoils.

The 154-year old Arnott’s, which began from a small bakery opened on Hunter St in Newcastle, NSW, hasn’t been Australian-owned since 1997 and like many once famous homegrown brands has been passed around like a game of pass the parcel with it now to be owned by KKR after it agreed to pay $US2.2 billion ($3.15bn) for the biscuits and snack-maker.

KKR, whose portfolio of businesses span property, financial services, infrastructure and IT, is buying the Arnott’s company from US foods giant Campbell Soup Company. It is notorious for slashing costs and jobs to fatten up a business for resale and will have workers worrying that Arnott’s under its new owners could shed a substantial number of jobs.

Once called Kohlberg Kravis Roberts & Co and named after its founders Jerome Kohlberg Jr and cousins Henry Kravis and George Roberts, KKR quickly gained a reputation in the 1980s as rapacious and ­aggressive, corporate raiders that seized undervalued or poorly run ­businesses, stripped out costs — which always meant jobs — and then flipped the company to a new owner for a tidy profit.

Earlier this year KKR announced it had lured back former prime minister Malcolm Turnbull to the private sector by appointing him a “senior global adviser”.

Its other high-profile senior advisers include former Qantas chairman Leigh Clifford, former boss of CSL, Brian McNamee. Retired US General David ­Petraeus joined KKR in 2013 as chair of one of its entities.

In the wild and cutthroat battle for biscuits and tobacco company RJR Nabisco in 1988, then the largest takeover ever seen, it inspired the description Barbarians at the Gate as they smashed down the walls protecting often lazy management to whip companies back into shape and profitability.

KKR have since spread their wings across asset classes and regions to now be a global player in the private equity space and it has been active in Australia, buying accounting software group MYOB, the local financial services offshoot of GE Money and Laser Clinics Australia.

KKR backed billionaire Kerry Stokes in 2006 by taking half of Seven Network’s assets, while it also narrowly lost to Perth-based conglomerate Wesfarmers last decade in a $20bn takeover battle for control of Coles supermarkets.

Arnott’s and Campbell Soup were tight-lipped about the pending sale but it is believed the US company will announce to its own US stockmarket this morning of the sale of Arnott’s to KKR.

KKR will get its hands on ­Arnott’s most famous brand the Tim Tam as well as Mint Slices, Wagon Wheel, Jatz, Savoy, ­Salada and Shapes.

Campbell Soup had signalled last year it was eager to sell off its overseas operations that ­included Arnott’s that is estimated to generate the bulk of Campbell Soup’s $1.4bn in offshore sales.