Nestle sells part of confectionery business to Ferrero for US$2.8 billion

Ashley Carr
January 19, 2018

Nestle said it was offloading brands such as Crunch, Nerds, Runts and Butterfinger to focus on other products.

"With Ferrero we have found an exceptional home for our USA confectionery business where it will thrive", says Schneider.

The deal would allow the Italian family-owned company "a broader offering of high-quality products to consumers of chocolate snacks, candies, confectionary and seasonal products", Ferrero Group executive chairman Giovanni Ferrero said in the statement.

The deal does not include its iconic Toll House baking products, a strategic growth brand which the company will continue to develop.

The transaction is subject to customary closing conditions and regulatory approvals and is expected to close around the end of the first quarter of 2018.

Overall, the company's US sales were around $27 billion in 2016.

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The Ferrero Group posted a consolidated turnover of 10.3 billion euros (12.5 billion US dollars) in 2016, with an 8.2 percent increase over the previous year.

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

In Britain Ferrero, known for Ferrero Rocher and Nutella, is the fourth largest chocolate company, with a turnover of £483 million and a market share of 7 per cent. The Alba, Italy-based company will also acquire Nestle's USA manufacturing facilities in Bloomington, Franklin Park and Itasca, Illinois.

The U.S. chocolate industry is in tumult. Previous year it acquired Ferrara Candy Co, maker of Red Hots and Lemonhead sweets, and confectioner Fannie May.

Founded as a family business in Italy in 1946, Ferrero entered the United Kingdom market in 1966 and acquired Thorntons in 2015.

Nestle was formed in 1905 with the merger of the Anglo-Swiss Milk Company, established in 1866 by brothers George and Charles Page, and Farine Lactee Henri Nestle, founded in 1866 by Henri Nestle.

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