Nestle Sells U.S. Confectionery Business for $2.8B

Swiss food and beverage giant Nestle is one step closer to shedding its U.S. confectionery business as an agreement was reached with Italian candy maker Ferrero to sell the unit for $2.8 billion, Nestle announced in a press release Tuesday.

“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,” remarked the Swiss firm’s chief executive officer, Mark Schneider, in the release.

Encompassing over 20 brands like Butterfinger, Nerds, and LaffyTaffy, Nestle’s confectionery business in the U.S. generated about $900 million in sales in 2016. The company said it will remain committed to its global confectionery brands like KitKat.

The transaction, which includes three manufacturing facilities in Illinois, positions Ferrero as the third biggest confectionery firm operating in the U.S. A corporate office in Glendale, CA and other locations in Illinois and New Jersey will remain in operation.

“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 a substantially greater scale, a broader offering of high-quality products to customers across the chocolate snack, sugar confectionery, and seasonal categories, and exciting new growth opportunities in the world’s largest confectionery market,” Giovanni Ferrero, executive chairman of the Ferrero Group, said in a separate press release Tuesday.

The cash transaction is expected to close in the first quarter of 2018.

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