Nestle has agreed to sell its US confectionery business to Ferrero, which owns Nutella and Kinder, forÂ US$2.8 billion in cash, a move affecting only its US business. The business currently represents about 3% of the Nestleâ€™s US group sales. In 2016, Nestle achieved US$900 million in confectionery sales, the press statement read.
The transaction covers theÂ US-focused confectionery brands only and does not include Nestleâ€™sÂ Toll HouseÂ baking products, which Nestle identifies as â€śa strategic growth brandâ€ť and will continue to develop.
Nestleâ€™s confectionery business consists of brands such as Butterfinger, Crunch, Chunky, BabyRuth, 100Grand, Raisinets, OhHenry!Â andÂ SnoCaps. It also includes sugar brands such asÂ SweeTarts, LaffyTaffy, Nerds, FunDip, PixyStix, Gobstopper, BottleCaps, SpreeÂ andÂ Runts.
â€śNestle remains fully committed to growing its leading international confectionery activities around the world, particularly its global brandÂ KitKat,â€ť the press statement said.
According to Nestle CEOÂ Mark Schneider, the move allows Nestle to invest and innovate across a range of categories where it see â€śstrong future growth and hold leadership positionsâ€ť. This includes pet care, bottled water, coffee, frozen meals and infant nutrition.
“With Ferrero we have found an exceptional home for ourÂ U.S.Â confectionery business where it will thrive,â€ť 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.