Nestle has agreed to sell its US confectionery business to Ferrero, which owns Nutella and Kinder, for¬†US$2.8 billion in cash, a move affecting only its US business. The business currently represents about 3% of the Nestle‚Äôs US group sales. In 2016, Nestle achieved US$900 million in confectionery sales, the press statement read.
The transaction covers the¬†US-focused confectionery brands only and does not include Nestle‚Äôs¬†Toll House¬†baking products, which Nestle identifies as ‚Äúa strategic growth brand‚ÄĚ and will continue to develop.
Nestle‚Äôs confectionery business consists of brands such as Butterfinger, Crunch, Chunky, BabyRuth, 100Grand, Raisinets, OhHenry!¬†and¬†SnoCaps. It also includes sugar brands such as¬†SweeTarts, LaffyTaffy, Nerds, FunDip, PixyStix, Gobstopper, BottleCaps, Spree¬†and¬†Runts.
‚ÄúNestle remains fully committed to growing its leading international confectionery activities around the world, particularly its global brand¬†KitKat,‚ÄĚ the press statement said.
According to Nestle CEO¬†Mark Schneider, the move allows Nestle to invest and innovate across a range of categories where it see ‚Äústrong future growth and hold leadership positions‚ÄĚ. This includes pet care, bottled water, coffee, frozen meals and infant nutrition.
“With Ferrero we have found an exceptional home for our¬†U.S.¬†confectionery business where it will thrive,‚ÄĚ 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.