Campbell Soup announced Monday it will buy Sovos Brands, the parent company of Rao's pasta sauce, in a deal valued at $2.7 billion.

Campbell will pay $23 per share for Sovos.

Last year, Sovos Brands posted more than $837 million in annual adjusted net sales, the company said. 

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"This acquisition fits perfectly with and accelerates our strategy of focusing on one geography, two divisions and select key categories that we know well," Campbell Soup CEO Mark Clouse said in a statement. "Our focused strategy has enabled us to deliver strong results over the last five years, enhance our brands and capabilities, and generate strong cash flow to lower debt."

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Campbell's meals and beverages division includes its ready-to-serve soups, tomato juice, gravies, and dinner sauces that are sold in the U.S. and Canada, and was its top revenue generator in 2022, according to its annual report.

Campbell’s said it plans to finance the acquisition through the issuance of new debt. Closing of the deal is expected by the end of December and is subject to Sovos Brands' stockholder approval and customary closing conditions, including regulatory approvals.

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The transaction has already been approved by both companies’ boards of directors.

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Reuters contributed to this report