Nestlé Exploring Sale of Its U.S. Confectionery Business -- Update

By Brian Blackstone Features Dow Jones Newswires

Nestlé SA said Thursday it is considering selling its U.S. confectionery business, maker of such products as the Butterfinger and Baby Ruth candy bars, as package-food giants struggle to boost growth and accommodate changing consumer tastes.

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The Swiss-based consumer giant said its U.S. confections business generated about 900 million Swiss francs ($922 million) in sales last year, or 3% of its total U.S. sales. Nestlé said the strategic review now under way doesn't include the company's Toll House baking products.

It wasn't immediately clear what price Nestlé would be seeking or who might be a buyer. Nestlé, the world's No. 3 confectioner by market share, competes with market leader Mars Inc. and second-ranked Mondelez International Inc. around the world.

Italy's Ferrero SpA, the privately held maker of Nutella and Tic Tac, and the global industry's fourth-largest player, has expanded aggressively recently through deals. It pushed into the U.S. by snapping up Chicago-based Fannie May Confections Brands earlier this year.

Sales of chocolate produced by large packaged-food companies have stalled globally in recent years, as consumers flock to healthier offerings. That has set off a round of consolidation across the industry. Last year, Mondelez launched an unsuccessful bid to buy Hershey Co., in a deal that likely would have topped $25 billion.

The possible sale by Nestlé doesn't include its much larger global chocolate business, which includes Kit Kat and chocolate drink Nesquik.

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"Nestlé remains fully committed to growing its leading international confectionery activities around the world, particularly its global brand Kit Kat," Nestlé said.

Write to Brian Blackstone at brian.blackstone@wsj.com

(END) Dow Jones Newswires

June 15, 2017 13:42 ET (17:42 GMT)