Nestle has agreed to sell its US confectionery business to Ferrero, which owns Nutella and Kinder, forĀ US$2.8 billion in cash, a move affecting only its US business. The business currently represents about 3% of the Nestleās US group sales. In 2016, Nestle achieved US$900 million in confectionery sales, the press statement read.
The transaction covers theĀ US-focused confectionery brands only and does not include NestleāsĀ Toll HouseĀ baking products, which Nestle identifies as āa strategic growth brandā and will continue to develop.
Nestleās confectionery business consists of brands such as Butterfinger, Crunch, Chunky, BabyRuth, 100Grand, Raisinets, OhHenry!Ā andĀ SnoCaps. It also includes sugar brands such asĀ SweeTarts, LaffyTaffy, Nerds, FunDip, PixyStix, Gobstopper, BottleCaps, SpreeĀ andĀ Runts.
āNestle remains fully committed to growing its leading international confectionery activities around the world, particularly its global brandĀ KitKat,ā the press statement said.
According to Nestle CEOĀ Mark Schneider, the move allows Nestle to invest and innovate across a range of categories where it see āstrong future growth and hold leadership positionsā. This includes pet care, bottled water, coffee, frozen meals and infant nutrition.
“With Ferrero we have found an exceptional home for ourĀ U.S.Ā confectionery business where it will thrive,ā Schneider added. The transaction is expected to close around the end of the first quarter of 2018, upon completion of customary approvals and closing conditions.