Nestlé has agreed to sell its US confectionery unit to Ferrero for €2.3 billion ($2.8 billion).
The recent announcemnet is the Swiss food giant’s first major divestment since chief executive Mark Schneiders appointment last year.
The sale of the unit, which includes popular US brands Butterfinger and Baby Ruth, is the first substantial step away from the confectionery industry by the company that invented milk chocolate.
The Italian maker of Nutella, is reportedly planning 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.
Weak Organic Growth
Hershey has been cutting 15% of its workforce and Lindt yesterday reported the weakest organic sales growth since 2009 amid 'sluggish' demand in North America.
The Nestlé unit, which also includes brands like Oh Henry!, Laffy Taffy and Nerds, is suffering a decline in revenue and had sales of about $900 m in 2016.
In a statement announcing the sale, it said it remains “fully committed” to its chocolate business around the world, which includes KitKat, which it produces globally except for the US, where Hershey owns the rights.
Nestle said in June it was considering options for the US confectionery unit, and said it attracted significant interest from bidders in July.
In December, the Switzerland based company said it expected to sell the business in the first quarter of 2018.
News by Bloomberg, edited by Checkout.