Nestlé sells U.S. confectionery business to Ferrero for $2.8B

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Nestlé sells U.S. confectionery business to Ferrero for $2.8B

By David Salazar - 01/16/2018
Nestlé will be selling its U.S. confectionery business to Ferrero. The $2.8 billion deal will make Tic Tac and Nutella maker Ferrero the third-largest confectionery company in the U.S. market, bringing under its arm a unit that had $900 million in sales in 2016.

“With Ferrero we have found an exceptional home for our U.S. confectionery business where it will thrive,” Nestlé CEO Mark Schneider said. “At the same time, 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.”

Along with a brand portfolio that includes such brands as Butterfinger, Wonka, Raisinets, 100Grand, BabyRuth, Crunch, SweeTarts and more, Ferrero will acquire three Illinois manufacturing facilities from Nestlé. The transaction excludes Nestlé’s Toll House baking products, which Nestlé said it would continue to develop. It also excludes the KitKat brand, which the company said it would continue to grow globally.

“We are very excited about the acquisition of Nestlé’s U.S. confectionery business, which has an outstanding portfolio of iconic brands with rich histories and tremendous awareness,” Ferrero executive chairman Giovanni Ferrero said. “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 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. We look forward to welcoming the talented team from Nestlé to Ferrero and to continuing to invest in and grow all of our products and brands in this key strategic and attractive market.”

Ferrero said it would continue to operate through its offices in Glendale, Calif., as well as other locations in Illinois and New Jersey. The two companies said they expect the transaction to close in the first quarter of 2018.