Burlington plant remains in Nestle's hands following chocolate business sell-off

Jan 19, 2018, 02:46
Burlington plant remains in Nestle's hands following chocolate business sell-off

Nestle has agreed to sell its United States confectionery business to Ferrero, which owns Nutella and Kinder, for US$2.8 billion in cash.

Ferrero which is an Italian manufacturer of branded chocolate and confectionery products and will become the US's third biggest confectionery maker in the USA and globally, according to London-based market research company Euromonitor International.

The deal includes Nestle's popular local chocolate brands such as Butterfinger, Crunch, BabyRuth, 100Grand, Raisinets, Chunky, OhHenry! and SnoCaps, as well as local sugar brands such as SweeTarts, LaffyTaffy, Nerds, FunDip, PixyStix, Gobstopper, BottleCaps, Spree and Runts.

Nestle will retain ownership of its US Tollhouse baking products and is also continuing to focus on its global KitKat brand. Other Nestle brands include Purina, Gerber and Stouffer's.

Nestle sold Butterfinger and its other US confectionery brands to Ferrero.

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The market lately has been tough for Nestle and Schneider has been working on growth strategy.

Ferrero is building its US presence at the same time that the big companies are diversifying beyond the sweets that made them famous. Ferrero's been trying to get in on the candy market in the USA for years now, buying the chocolatier Fannie May last year.

In September, Nestle announced that it bought a majority stake in Blue Bottle Coffee, a high-end coffee company.

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. This is the first big sale of the world's biggest packaged-food company.

Consequently, it is selling the USA confectionery business for $2.8 billion in cash and expects the deal to complete sometime within the next couple of months, toward the end of the first quarter.