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American sweet manufacturer Ferrara Candy Company is set to put in a bid to purchase Nestlé’s US confectionery business, Reuters has reported.
If it goes ahead, the proposed deal would see Nestlé brands such as Butterfinger and BabyRuth join the Ferrara portfolio.
Nestlé said in June that it would ‘explore strategic options’ to sell its US confectionery business, which generated $924 million in sales last year.
Weeks later US activist hedge fund Third Point bought a $3.5 billion stake in Nestlé and has been pressuring the Swiss company to improve its performance.
The move by Nestlé to sell its confectionery business is the first major decision by Mark Schneider, who became the company’s CEO last year. He aims to focus the company on fast-growing areas such as coffee and pet food.
The business said it will continue to focus on growing its international confectionery activities, centred on global brand KitKat. Last year its worldwide confectionery sales were $9 billion.
With sales of $27.4 billion in 2016, the US is Nestlé’s largest market, with the confectionery business representing around 3% of US sales.
It is unlikely that a potential deal would include Nestlé’s Toll House baking products, which it seeks to develop in the US.
Ferrara was formed in 2012 following a merger of Ferrara Pan Candy Company and Farley’s and Sathers Candy Company. Its products include Lemonheads, Jujyfruits and Chuckles.
© FoodBev Media Ltd 2017