Nestle sells candies business to Ferrero for 4 billion

by Susie Olson January 19, 2018, 2:43
Nestle sells candies business to Ferrero for 4 billion

Ferrero, which has over $12bn in global sales, will gain more than 20 American familiar brands and includes chocolate brands such as Butterfinger, BabyRuth, 100Grand and Raisinets along with candies Nerds and SweeTarts.

Nestle CEO Mark Schneider said: "With Ferrero we have found an exceptional home for our USA confectionery business where it will thrive".

Ferrero, founded in Alba in 1946, will be the third largest confectionery group in the United States. Nestle plans to focus on healthier and faster-growing categories like coffee, pet food and water as the food industry grapples with a drop in demand for sugary products.

The sale does not include Nestle's Toll House baking products and its leading worldwide confectionery activities around the world, including its global brand KitKat.

The deal is expected to close at the end of the first quarter.

The sale will make Ferrero the third-largest confectionery company in the USA market.

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Ferrero is building its USA presence at the same time that the big companies are diversifying beyond the sweets that made them famous.

Nestlé is the world's largest food company, according to the 2017 Forbes Global 2000.

The acquisition of Nestlé will make Ferrero the third-largest USA confectionery business behind Hershey and Mars. The Alba, Italy-based company will also acquire Nestle's US manufacturing facilities in Bloomington, Franklin Park and Itasca, Illinois. Last year Ferrero acquired Ferrara Candy, the maker of Lemonheads and RedHots, in an attempt to take a bite out of the USA candy market.

The family-run Ferrero has 22 production sites and 30,000 employees.

It has snapped up companies that make vegetarian meals, vitamins and luxury coffee.Its U.S. candy business registered sales of some 900 million Swiss francs in 2016, in a market worth an overall $8 billion, according to Ibis World.

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