Illinois Ag Connection - Nestle Agrees to Sell U.S. Confectionery Business to Ferrero

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Nestle Agrees to Sell U.S. Confectionery Business to Ferrero
Illinois Ag Connection - 01/18/2018

Nestle announced that it agreed to sell its U.S. confectionery business to Ferrero for $2.8 billion in cash. Nestle's 2016 U.S. 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.

Nestle CEO Mark Schneider commented: "With Ferrero we have found an exceptional home for our U.S. confectionery business where it will thrive. At the same time, this move allows Nestle 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."

Nestle's U.S. confectionery business represents about three percent of U.S. Nestle 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 U.S.-focused confectionery brands only and does not include Nestle's iconic Toll House baking products, a strategic growth brand which the company will continue to develop. Nestle remains fully committed to growing its leading international confectionery activities around the world, particularly its global brand KitKat.

With sales of around $27 billion in 2016, the U.S. is Nestle's largest market. Nestle products can be found in 97 percent of U.S. households under brands such as Purina, Nestle Pure Life, Coffee-Mate, Gerber and Stouffer's. The company employs 50,000 people in more than 120 locations across the US, including 77 factories and 10 R&D centers.

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