Nestlé sells U.S. confectionery business to Ferrero for $2.9 billion
Nestlé has agreed to sell its U.S. confectionery business to Ferrero for CHF 2.8 billion in cash (approximately $2.9 billion).
Nestlé has agreed to sell its U.S. confectionery business to Ferrero for CHF 2.8 billion in cash (approximately $2.9 billion). Nestlé’s 2016 U.S. confectionery sales reached about CHF 900 million (approximately $936 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.
Nestlé’s U.S. confectionery business represents about 3% of U.S. Nestlé Group sales. It includes popular local chocolate brands such as Butterfinger, Crunch, Baby Ruth, 100Grand, Raisinets, Chunky, OhHenry!, and SnoCaps, as well as local sugar brands such as SweeTarts, LaffyTaffy, Nerds, FunDip, PixyStix, Gobstopper, BottleCaps, Spree, and Runts.
With this transaction, Ferrero will become the third-largest confectionery company in the U.S. market where it is best known for Tic Tac breath mints, Ferrero Rocher pralines, Nutella hazelnut spreads, the Fannie May and Harry Londonchocolate brands, and the Ferrara Candy Co.
Ferrero will acquire Nestlé’s U.S. manufacturing facilities in Bloomington, Franklin Park, and Itasca, Ill., and the confectionery-related employees, and will continue to operate through the offices in Glendale, Calif., as well as from its other current locations in Illinois and in New Jersey.
“Our commitment to deliver value to the North American consumers and customers will be strongly enhanced by the arrival in our portfolio of such powerful confectionery and chocolate brands,” said Lapo Civiletti, CEO of the Ferrero Group.
“With Ferrero, we have found an exceptional home for our U.S. confectionery business where it will thrive,” said Nestlé CEO Mark Schneider. “At the same time, this move allows Nestlé 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.”
The transaction covers the U.S.-focused confectionery brands only and does not include Nestlé’s Toll House baking products, a strategic growth brand that the company will continue to develop. Nestlé remains committed to growing its leading international confectionery activities around the world, particularly its global brand KitKat.