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Race To Acquire Nestlé's US Confectionery Business Continues

By Publications Checkout
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Race To Acquire Nestlé's US Confectionery Business Continues

The battle for Nestlé's US confectionery business is ongoing, with a number of companies said to have made bids for the candy unit in recent days.

CNBC first reported that both US chocolate company Hershey and Italy's Ferrero had submitted their final bids on Friday.

The two companies have been linked to a potential purchase since the sale of the business, valued at around $2.5 billion, was first announced last summer.

Meanwhile, the Financial Times reports that US-based private-equity group Rhône Capital has also joined the race, but added that sources close to the matter expect Ferrero to be the likely winner.

Last month, Nestlé confirmed that it planned to reach a sale of the unit in the first quarter of this year.

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Snack-Food Deals

Hershey was seen as a potential bidder early on. In 2016, the maker of Chocolate Kisses rejected a takeover bid from Mondeléz International, and it now seems to be looking at new acquisitions to show its strength.

The US candy giant announced its $1.6 billion acquisition of Amplify Snack Brands, which is best known for SkinnyPop popcorn and Tyrell's potato chips/crisps, last month.

Ferrero, however, has also been making moves to expand its portfolio in the US, where it currently markets Tic Tac mints, Ferrero Rocher and Nutella.

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Last October, the confectioner announced plans to acquire US-based Ferrara Candy Company, which produces brands such as Trolli gummy sweets and Lemonheads, expressing an intention to expand its business further.

Strategic Shift

Nestlé announced its intention to sell the US candy division, which includes the Butterfinger and Baby Ruth brands, after a strategic review last summer.

This would be the first major deal for Mark Schneider, who became CEO of the company last year after a career in the medical and pharmaceutical industry. He is directing Nestlé towards the fast-growing health-care category.

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This shift was seen with the group's most recent move – a $2.3 billion acquisition of Canadian dietary-supplement business Atrium Innovations.

Atrium manufactures a range of vitamins and dietary supplements, and its largest brand, Garden of Life, is sold in more than 14,000 health-food stores and online in the US.

The company said that the move supports its “pursuit of growth opportunities” in the consumer health-care sector and adds to its extensive food and beverage portfolio.

© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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