Nestle will sell its confectionery business in the U.S. to Ferrero the Italian chocolate and candy maker for what is estimated to by more than $2.8 billion, said officials from the company on Tuesday.
Nestles’ sweets in the U.S. included Butterfinger, Nestle Crunch, Baby Ruth, Nips, Raisinets, Laffy Taffy and Skinny Cow.
Nestle’s confectionery sales in the U.S. for 2016 were approximately $900 million and account for 3% of the Nestle Group’s U.S. sales said the Switzerland-based company.
The move will allow Nestle to invest as well as innovate throughout a range of different categories where it see’s strong growth for the future and hold positions of leadership in bottled water, pet care, frozen meals, infant nutrition and coffee, said CEO Mark Schneider.
Nestle is the largest food company in the world, according to industry publications.
Ferrero, which has its headquarters in Luxembourg, is known best for Ferrero Rocher chocolates, but is the owner of other favorites such as Tic Tacs and Nutella.
The acquisition will make the candy maker the third biggest chocolate confectionery worldwide, according to Euromonitor International a market research firm based in London.
Giovanni Ferrero, who is the Ferrero Group executive chairman, said through a prepared statement that the company was excited about its acquisition of the confectionery business of Nestle in the U.S. as it has a great portfolio of brands that are rich in history.
A food analyst in London said that the acquisition would help Ferrero to achieve a goal of increasing its presence across the U.S.
Ferrero acquired Fannie May Confections in May at the price of $115 million and this past October announced its plans to acquire Ferrara Candy Company, which is best known for Trolli, Lemonheads and Brach’s. The price of that purchase was not disclosed.
The sale of the U.S. candy business of Nestle does not include KitKat the global chocolate brand of the company or its baking line Toll House.
Nestle, which is also the owner of Coffee-Mate, Purina, Stouffer’s and Gerber has acquired several companies and is shifting from its roots in confectionery.
Last September, the company acquired a majority stake in Blue Bottle Coffee an Oakland, California based specialty coffee roaster as well as retailer. In December, it announced its plans to acquire Atrium Innovations the privately-held health products maker that is based in Quebec. The price of that acquisition is $2.3 billion.
The sale of its candy business in the U.S. is expected to close before the end of the first quarter, said Nestle.