One of Australia’s most iconic brands has changed hands again in a multi-billion-dollar deal.
After being controversially taken over by US giant Campbell’s soup company in 1997, Arnott’s was reportedly sold to American private equity firm Kohlberg Kravis Roberts (KKR) for $A3.14 billion last week.
The biscuit manufacturer boasts a product range that includes the likes of Tim Tams, Milk Arrowroot, Jatz, Shapes, and Mint Slice.
Its roots lie in Morpeth, where Scottish baker William Arnott first set up shop before relocating to Newcastle in 1865.
Mr Arnott’s great great great grandson, Stephen, purchased the historic Arnott bakehouse, circa 1850, on Swan Street in the early 2000s, alongside his wife, Allison, and began to bake sourdough.
Stephen believes the sale of Arnott’s to KKR is a “good move” amid hope it will one day return to Australian hands.
“My understanding is they buy firms, jazz them up, and sell them, so hopefully they’ll sell it back to an Australian interest,” he tells Newcastle Weekly.
“I think it’s a good move – if something is just sitting in a foreign company and just stays there then there is no hope.
“With KKR purchasing it, it does give us, here in Australia, a little bit of hope that they might offer it back to the Australian market.
“I think, if they’ve got any real interest in making a fair amount of money out of the transaction, then that would be a good business decision.”
There have been cases of both occurring in recent years.
In 2017, famous spread Vegemite returned to Australian ownership when dairy company Bega Cheese acquired it from Mondelez International, a rebrand of the former Kraft Foods, for $A460 million.
However, Australia’s largest beer maker, Carlton & United Breweries, remains in foreign hands after its Belgium-headquartered owners Anheuser-Busch InBev (AB InBev) sanctioned a $A16 billion sale to Japan’s Asahi last month.
Stephen says the public perception of Australian companies selling out to overseas investors is not reality.
“I’ve had people march in the door, basically, and say: ‘why did you sell Arnott’s to the Americans?’” he says.
“But, it’s like, I didn’t – you did.
“It’s the public that is actually selling the companies – they’re the shareholders – or superfunds.
“If I had a superfund that was saying we’re looking at selling out interests to a foreign company, I’d be sending an email or a letter to the superfund who worked for me.”
According to intellectual property (IP) Australia, the public voted Arnott’s as the third most popular Australian trademark, behind only The Woolmark Company and ABC symbols.
The top 10 list, released in 2014, also included David Jones, Penfolds, Qantas, R.M. Williams, Vegemite, Weet-Bix, and the Australian rugby union team.
Stephen says Arnott’s has played an important role in the local community.
More than 50,000 Australians are stated to have worked with the company during the past century, including thousands at the Newcastle factory before its closure in 1942.
“A lot of people walk in the door here and say: ‘My father, or my mother, did packaging’ or whatever – all sorts of things, which is quite unique because I don’t think that really happens in Sydney,” he says.
“My grandfather told me that one guy lost the bottom half of his arms in a machine and, in those days, there was no such thing as workers compensation.
“A lot of businesses would say: ‘Oh, here’s 100 pounds, see you later.’
“But he said that his father gave the man a job in distribution, because he could still pick up boxes, employed all of his children when they were of that age, and gave his wife a job in packaging – for life – in return for that tragedy.
“So, it was a family business.”
More stories:
