Nestlé selling US confectionery business to Ferrero

The move signals further efforts to switch the Swiss food group's focus on healthier products.

Nestlé today announced that it agreed to sell its US confectionery business to Ferrero for CHF 2.8 billion in cash.

Nestlé's 2016 U.S. confectionery sales reached about CHF 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.

"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," says Nestlé CEO Mark Schneider.

Nestlé's US confectionery business represents about three percent of US Nestlé Group sales. It includes popular chocolate brands such as Butterfinger, Crunch, BabyRuth, 100Grand, Raisinets, Chunky, OhHenry! and SnoCaps, as well as sugar brands such as SweeTarts, LaffyTaffy, Nerds, FunDip, PixyStix, Gobstopper, BottleCaps, Spree and Runts.

The transaction covers the US-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 says it remains fully committed to growing its leading international confectionery activities around the world, particularly its global brand KitKat.

With sales of CHF 26.7 billion in 2016, the US is Nestlé's largest market. Nestlé products can be found in 97 percent of US 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 US, including 77 factories and 10 R&D centers.

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Debra Schug was Editor-in-Chief of Food Engineering. She began her media career over a decade ago writing and producing broadcast news for both television and radio at the local and national level. She spent many years as the managing editor for two trade magazines in the oil industry and the research editor for an annual petroleum report. She has a master’s degree in journalism and mass communication from Iowa State University.