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Nestle selling United States candy brands to Nutella company

Nestle selling United States candy brands to Nutella company

Nestle said on Tuesday (Jan 16) it has agreed to sell its United States candy business to Italy's Ferrero for CHF 2.8 billion (US$2.9 billion) in cash as the Swiss food giant shakes up its product portfolio.

After a review of its portfolio last summer, Nestle hinted that it might sell its US business, with its eye on higher-growth areas like pet care, coffee and infant nutrition.

"Our commitment to invest in the U.S.is as big as ever", Nestle USA chief Paul Grimwood said on a call. Other Nestle brands include Purina, Gerber and Stouffer's.

Hershey has the license for KitKat in the U.S. But Nestle still owns the brand and it's not part of the Ferrero deal.

The sale does not include Nestle's Toll House baking products and its leading worldwide confectionery activities around the world, including its global brand KitKat.

Ferrero, the world's third largest confectionery company, will acquire 20 American brands including Laffy Taffy, Wonka and Butterfinger.

The transaction covers Nestle's candy brands only and does not include Nestle's iconic Toll House baking products, a strategic growth brand which the company will continue to develop.

Even though its candy sales reached about $900 million in the U.S.in 2016, confections make up a small part of Nestle's US sales, which totaled almost $28 billion the same year, according to the company.

Hershey did not win its latest bid to consolidate its leading position in the USA retail chocolate market, but that may not be a bad thing.

Ferrero was founded as a family business in Alba, Italy, in 1946, and entered the US market in 1969 with Tic Tac breath mints.

Ferrero, the third-largest company in the global chocolate confectionary market, had global sales of more than $12 billion in 2016.

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