Nestlé Sells Confectionery Business to Ferrero For $2.8 Billion
The Swiss company will now have to say goodbye to their Nestlé Crunch, Butterfinger, Baby Ruth, Raisinets, Nips, Skinny Cow, Laffy Taffy, Nerds and more.
Nestlé is parting ways with their American well-loved treats as it sells its confectionery business to Italy’s Ferrero for $2.8 billion, the company confirmed Tuesday. The deal is said to be the first major sale of Nestlé’s CEO Mark Schneider and is the start of their path to make healthier products.
“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,” CEO Mark Schneider said in a statement.
The deal does not include the global chocolate brand KitKat and the Toll House baking line, which is a separate franchise.
According to Nestle’s, the company sales of their U.S. confectionery treats reached $900 million and represents around 3% of the U.S. Nestle Group’s sales in 2016.
Once Ferrero gets its hands on Nestle’s treats, the Italian family-owned company will become the third-largest chocolate confectionery in the world, according to London-based market research company Euromonitor International.
“We are very excited about the acquisition of Nestle’s U.S. confectionery business, which has an outstanding portfolio of iconic brands with rich histories and tremendous awareness,” Giovanni Ferrero, executive chairman of the Ferrero Group, said in a statement.
The deal will also make Ferrero reach its goal of expanding their presence in the United States, according to Raphael Moreau, senior food and nutrition analyst at Euromonitor International.
In September last year, Nestlé announced its acquisition of a majority stake in Oakland-based high-end specialty coffee roaster and retailer Blue Bottle Coffee. It also announced last month that the company has plans on buying privately-held Atrium Innovations, a company based in Quebec that makes nutritional health products, for $2.3 billion.
Photo Credit: Mark Lennihan