Ferrero to acquire Nestlé's U.S. confectionary business
Ferrero Is the Third-Largest Company in the Global Chocolate Confectionary Market and this U.S. Transaction Will Strengthen its Worldwide Position
Will Become Third-Largest Confectionary Company in the U.S., Reflecting Strong Commitment to Growth in a Key Strategic and Attractive Market
Will Enhance Product Portfolio with Range of Iconic Chocolate and Sugar Confectionary Brands
Will Expand Presence in Highly Complementary Chocolate Snack and Seasonal Categories
LUXEMBOURG – January 16, 2018 – The Ferrero Group and its affiliated companies (“Ferrero”), a global confectionary group, today announced a definitive agreement pursuant to which it will acquire the U.S. confectionary business from Nestlé for $2.8 billion in cash. Nestlé’s U.S. confectionary business generated sales of approximately $900 million in 2016.
Ferrero will acquire more than 20 American brands with a rich heritage and strong awareness, including iconic chocolate brands such as Butterfinger®, BabyRuth®, 100Grand®, Raisinets®, Wonka® and the exclusive right to the Crunch® brand for confectionary and certain categories in the U.S., as well as sugar brands such as SweeTarts®, LaffyTaffy®, and Nerds®.
With this transaction, Ferrero will become the third-largest confectionary company in the U.S. market where it is best known for Tic Tac® breath mints, Ferrero Rocher® pralines, Nutella® hazelnut spreads, the Fannie May and Harry London chocolate brands, and the Ferrara Candy Company, which was recently acquired by a Ferrero affiliated company and whose portfolio of brands includes Trolli®, Brach’s® and Black Forest® Gummies.
Ferrero will acquire Nestlé’s U.S. manufacturing facilities in Bloomington, Franklin Park and Itasca, Illinois, and the confectionary-related employees, and will continue to operate through the offices in Glendale, California, as well as from its other current locations in Illinois and in New Jersey.
Giovanni Ferrero, Executive Chairman of the Ferrero Group, said, “We are very excited about the acquisition of Nestlé’s U.S. confectionary business, which has an outstanding portfolio of iconic brands with rich histories and tremendous awareness. In combination with Ferrero’s existing U.S. presence, including the recently acquired Fannie May Confections Brands and the Ferrara Candy Company, we will have substantially greater scale, a broader offering of high-quality products to customers across the chocolate snack, sugar confectionary and seasonal categories, and exciting new growth opportunities in the world’s largest confectionary market. We look forward to welcoming the talented team from Nestlé to Ferrero and to continuing to invest in and grow all of our products and brands in this key strategic and attractive market.”
“Our commitment to deliver value to the North American consumers and customers will be strongly enhanced by the arrival in our portfolio of such powerful confectionary and chocolate brands,” said Lapo Civiletti, CEO of the Ferrero Group.
The transaction is subject to customary closing conditions and regulatory approvals and is expected to close around the end of the first quarter of 2018.
Credit Suisse Securities, Davis Polk and Wardwell LLP and Lazard served as advisors to Ferrero.
Founded as a family business in Alba, Italy in 1946, Ferrero is the third-largest company in the global chocolate confectionary market, with global sales of over $12 billion, distribution across over 170 countries, and a workforce of more than 30,000 people across 55 countries.
Ferrero entered the U.S. in 1969 with Tic Tac® breath mints, which have become an icon in the breath mint market, and subsequently introduced Ferrero Rocher® pralines and Nutella® hazelnut spread to the U.S. market. Ferrero recently acquired U.S. chocolate company Fannie May Confections Brands, which through its Fannie May and Harry London brands provides offerings across key categories including chocolate bars, pralines and other snacks, as well as Ferrara Candy Company, a leader in gummy and seasonal confectionary with brands such as Trolli, Brach’s and Black Forest.
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