Campbell Soup Co.’s $2.7 billion acquisition of Sovos Brands Inc. – the Colorado-based parent company of Rao’s pasta sauce – is being delayed as the U.S. Federal Trade Commission seeks more information about the proposed deal.

Originally expected to close by December of this year, the transaction will now likely be complete by mid-2024, the Camden-headquartered soup and snacks maker said in an Oct. 23 press release. 

“A second request for information is a common feature of the regulatory review for transactions of this type under the Hart-Scott-Rodino Antitrust Improvement Act,” Campbell said in a statement, adding that it “will continue to engage with the FTC on their review.”

In August, Campbell announced plans to purchase Sovos, whose portfolio also includes Michael Angelo’s frozen entrees and Noosa yogurt, and incorporate the company into its meals and beverage division. Under the terms of the all-cash offer, approved Oct. 16 by Sovos’ stockholders, the purchase will be financed through new debt, with a projected leverage of 4.7x, and is expected to produce annualized cost synergies reaching $50 million within two years, according to Campbell.

Founded in 2017, Sovos sells a range of premium products across North America, including pasta sauces, dry pasta, soups, frozen meals and yogurts. With an annual adjusted net sales of $837 million in 2022, the company’s flagship, Rao’s, accounted for 69% of earnings and grew organic net sales by 34.9% during the period, Sovos reported.

Campbell believes bringing Rao’s into its sauce lineup – which now consists of lower-priced Prego sauces and Swanson broths – will enable the company to deliver on its strategic goal of building a $1 billion sauce business by entering the “ultra-distinctive pasta sauce” space.

Rao’s originated as one of New York City’s most exclusive Italian-American restaurants and then evolved into a sauce brand when the eatery’s owner, Frank Pellegrino Sr., began jarring and selling the signature marinara sauces in retail outlets in 1992. Now, Rao’s lineup includes a range of sauces, dry pasta, soups and frozen foods sold online and in grocery stores.

Considered by consumers to be a cut above other store-bought sauces, Rao’s is slow-simmered, made in small batches and features top-notch ingredients, including hand-picked tomatoes from Italy and pure Italian olive oil.

During an interview with Yahoo Finance over the summer, Campbell Chief Executive Officer Mark Clouse said the company is eyeing greater distribution of Rao’s sauces as well as a push into the frozen section with new products. However, there’s a possibility the company could sell off Noosa, as Clouse said he views the brand as “non-core.”

Reuters noted that a number of M&A deals in the technology and consumer sectors have come under scrutiny by regulators recently due to concerns over the potential of reducing competition in violation of antitrust laws.

In this instance, Food Dive reported that the FTC is “likely focusing” on an overlap that could occur if Campbell added another pasta sauce brand to its company, with an industry analyst estimating the company’s market share of the pasta sauce category could grow from 19.3% to 36.3%, bringing it close to what the FTC considers “moderately consolidated and subject for increased review.”