Premier Foods, the owner of Branston Pickle and Loyd Grossman sauces, has added Oxo stock cubes and Fray Bentos tinned meat pies to its larder after agreeing its biggest deal to date.

The £460 million acquisition of Campbell Soup Company's UK and Irish operations will be funded by a Pounds 450 million rights issue, which effectively will double Premier Foods's issued capital base. Despite the size of the acquisition, Robert Schofield, Premier Foods's chief executive, refused to rule out doing another deal soon. He left the door open for a renewed bid for the UK operations of United Biscuits, the McVitie's and KP Nuts maker. Premier had previously failed to join a consortium, led by Kraft, the American food group, aimed at breaking up United Biscuits.

Mr Schofield would not discuss his interest in United Biscuits, but he reiterated that the Campbell deal would leave Premier Foods in a strong position to pursue its acquisition strategy. Premier Foods, which was advised by NM Rothschild, is paying Campbell Pounds 460 million for a business that also includes the Homepride sauces and Batchelors soups. Premier Foods will acquire three factories in Britain and one in the Republic of Ireland.

The Campbell's brands will add £263 million of sales and £54 million of gross profit to Premier Foods, whose top line will grow to £1 billion and gross profit to £178 million. The company expects a rapid integration of the Campbell's brands, but Mr Schofield said that it would take up to three years to generate an expected Pounds 28 million in annualised cost savings. He would not rule out reducing the enlarged group's factory footprint, although he said: "We aren't even in the (Campbell's) door yet." Premier Foods' shareholders welcomed the acquisition, marking the company's shares up 20p to close at 329p, despite the rights issue, which will be priced at around 160p. Shareholders will be asked to approve the rights issue at a meeting next month.

Stuart Whitwell, joint managing director of Intangible Business, the brand valuation consultancy, said that the Campbell's brands would enhance the value of Premier Foods' own brands.

"A more powerful stable of brands will bolster its relationships with the supermarkets to secure distribution, shelf space and in-store positioning. This will benefit not only the new brands but also Premier's existing brands," he said.

Mr Schofield said that the Campbell's deal would be profit-enhancing in its first year. In addition, it increases Premier Foods' mix of branded products from about 56 per cent to 64 per cent, thereby reducing its reliance on providing foods for supermarkets' own-label products. The improvement in Premier Foods' range of brands is crucial at a time when supermarkets are seeking cheaper prices from the makers of their own-label products. Analysts expressed confidence that Mr Schofield and Paul Thomas, the finance director, would be able to successfully integrate and grow the Campbell's brands, given their track record with previous Premier Foods acquisitions.

STOCKING THE GROCERY CUPBOARD

• July 20, 2004: Premier Foods, owner of the Typhoo tea, Branston pickle, Sun Pat peanut butter and Hartley's jam brands, lists on London Stock Exchange with a market capitalisation of about £540 million
• December 9, 2005: Buys Bird's custard for £70 million
• June 6: Buys the Quorn meat-substitute brand for £172 million
• October 13: Sells Typhoo tea for £80 million
• October 17: Sells Dutch-based Jonker Frits vegetable business, thought to be worth Pounds 17.3 million
• October 31: Buys Cauldron meat meals and snacks brands (£27 million)
• July 12, 2006: Buys UK and Ireland Campbell Soup brands (£460 million).
• Seeks United Biscuits brands