Nestle selling US candy business for $2.8 billion

19 January, 2018, 02:42 | Author: Celia Hoffman
  • Nestle new portfolio

Nestle said it was offloading brands such as Crunch, Nerds, Runts and Butterfinger to focus on other products.

Nestle's business in the USA market generated a turnover of about 900 million US dollars in 2016, according to Ferrero.

The deal will move Ferrero into third place in terms of USA chocolate market share, at about 11 percent.

This year alone, he has made six acquisitions which include Chameleon Cold Brew, Freshly Inc, Sweet Earth Inc, Terra Canis GmbH, Blue Bottle Coffee Inc and others.

The sale does not include Nestle's Toll House baking products and its leading worldwide confectionery activities around the world, including its global brand KitKat.

The transaction is expected to close around the end of the first quarter of 2018 after approvals and closing conditions.

Overall, the company's USA sales were around $27 billion in 2016. The business now represents about 3% of the Nestle's USA group sales.

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Closely held Ferrero has recently been targeting the United States market.

Ferrero bought Fannie May Confections Brands from 1-800-FLOWERS in May for $115 million and in October announced plans to buy Ferrara Candy Co. - best known for Brach's, Trolli and Lemonheads - from private equity firm L Catterton for an undisclosed amount.

These include pet care, bottled water, coffee, frozen meals and infant nutrition, he added.

By acquiring Nestle's USA candy business, Ferrero can likely reduce its production, distribution and ingredient costs, saving the company money. It has been making Nutella since 1964.

The family-run Ferrero businesses have 22 production sites and 30,000 employees.In 10 years the company has more than doubled its turnover, to more than 10 billion euros.

Nestle was formed in 1905 with the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George and Charles Page, and Farine Lactee Henri Nestle, founded in 1866 by Henri Nestle.

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