Ferrero Buys Nestlé’s US Confectionery Business for USD2.8bn

Nestlé announces that it has agreed to sell its USD900m confectionery business to Ferrero for USD2.8bn in cash.

The acquisition means that Ferrero will own the facilities in Bloomington, Franklin Park and Itasca, Illinois, and will continue to operate through the offices in Glendale, California, as well as from its other current locations in Illinois and in New Jersey.

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 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 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.”

Giovanni Ferrero, executive chairman of the Ferrero Group, said: “In combination with Ferrero’s existing U.S. presence, including the recently acquired Fannie May Confections Brands and the Ferrara Candy Company, we will have substantially greater scale, a broader offering of high-quality products to customers across the chocolate snack, sugar confectionary and seasonal categories, and exciting new growth opportunities in the world’s largest confectionary market.”

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, 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 Nestlé’s iconic Toll House baking products, a strategic growth brand which the company will continue to develop. Nestlé will continue growing its international confectionery activities around the world, particularly its global brand KitKat, the announcement reads,” according to the company’s announcement.

Nestlé products can be found in 97% of U.S. households under brands such as Purina, Nestlé Pure Life, Coffee-Mate, Gerber and Stouffer’s. The company employs 50,000 people in more than 120 locations across the U.S., including 77 factories and 10 R&D centers.

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