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Nestlé to sell US confectionery business to Ferrero for $2.8 billion
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Thursday, 18 January, 2018, 08 : 00 AM [IST]
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Nestlé announced that it had agreed to sell its US confectionery business to Ferrero for $2.8 billion in cash. Nestlé’s 2016 US confectionery sales reached about $900 million. The transaction is expected to close around the end of the first quarter of 2018, following the completion of customary approvals and closing conditions.
Mark Schneider, chief executive officer, Nestlé, said, “With Ferrero, we have found an exceptional home for our US confectionery business where it will thrive.”
“At the same time, this move allows Nestlé to invest and innovate across a range of categories, where we see strong future growth and hold leadership positions, such as pet care, bottled water, coffee, frozen meals and infant nutrition,” he added.
Nestlé’s US confectionery business represents about three per cent of US Nestlé Group sales. It includes popular local chocolate brands such as Butterfinger, Crunch, BabyRuth, 100Grand, Raisinets, Chunky, OhHenry! and SnoCaps, as well as local sugar brands such as SweeTarts, LaffyTaffy, Nerds, FunDip, PixyStix, Gobstopper, BottleCaps, Spree and Runts.
The transaction covers the US-focused confectionery brands only and does not include Nestlé’s iconic Toll House baking products, a strategic growth brand which the company will continue to develop.
Nestlé remains fully committed to growing its leading international confectionery activities around the world, particularly its global brand KitKat.
With sales of CHF 26.7 billion in 2016, the United States is Nestlé’s largest market. Nestlé products can be found in 97 per cent of US households under brands such as Purina, Nestlé Pure Life, Coffee-Mate, Gerber and Stouffer’s.
The company employs 50,000 people in over 120 locations across the US, including 77 factories and 10 research and development (R&D) centres.
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