Nestle sells candy brands to Ferrero

by Madeline King

Sports Editor


Swiss food company Nestle plans to sell more than 20 of its American confectionery brands to the Italian chocolate and candy company Ferrero for $2.8 billion in cash, according to a statement both companies released on Jan. 16. The deal will make Ferrero, known for its Nutella and Ferrero Rocher chocolate, the third-largest confectionery company in the US market.

In 2016 Nestle sold about $900 million worth of its candy brands in the US, representing about 3% of the company’s almost $28 billion total in US profits last year. The 2017 Forbes Global 2000 named Nestle as the world’s largest food company, and their products can be found in 97 percent of American households. The sale to Ferrero includes the rights to popular candy brands such as 100Grand, Butterfinger, Baby Ruth, LaffyTaffy, Nerds, and more; however, Nestle will retain hold over its global Kit Kat brand and continue to develop its iconic Toll House baking line. Ferrero also included in the announcement that it will be acquiring Nestle’s US-based manufacturing facilities in multiple Illinois locations, as well as their confectionary-related employees. They will continue to operate through Nestle offices in Glendale, California, as well as their other locations in Illinois and New Jersey.

Nestle CEO Mark Schneider said in a statement that “[the move] allows Nestle to invest and innovate across a range of categories where [they] see strong future growth and hold leadership positions, such as pet care, bottled water, coffee, frozen meals, and infant nutrition.” The company will continue to develop popular North American non-confectionery brands such as Coffee-Mate, Gerber, and Nestle Pure Life.

Executive chairman of the Ferrero Group Giovanni Ferrero stated on behalf of the company that “[they] are very excited about the acquisition of Nestle’s US confectionery business, which has an outstanding portfolio of iconic brands with rich histories and tremendous awareness.” The recent procurement of the company comes after Ferrero’s acquisition last year of Ferrara Candy Company, famous for making Lemonheads, for about $1.3 billion and Fannie May Confections for $155 million.

The companies expect the candy sale to be completed towards the end of the first quarter of 2018, according to Ferrero.

(Sources: USA Today, CNN Money, WSJ, Ferrero, Nestle)

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