Nestle Selling US Confectionery Biz To Italy’s Ferrero

Nestle is to sell its US confectionery business amid the unit’s weak position in the country and tough competitions from Hershey, Mars and Lindt.

CEO Mark Schneider said Tuesday the unit will be sold to Italy’s Ferrero for $2.8 billion. This is the first big sale of the world’s biggest packaged-food company.

Schneider added the move is a small step on the path of the company towards healthier products.

Meanwhile, Ferrero is looking the deal as its good opportunity to build scale in the key market. Last year the family-owned company struck two other deals too.

After the deal Ferrero will become the third-largest chocolate company in the US as well as in the world.

Nestle fist sold its milk chocolate in the 1880s and since then there has been shift in the taste of consumers from junk and sugary foods.

The new deal accounts just 1 percent of Nestle’s sales.

The market lately has been tough for Nestle and Schneider has been working on growth strategy. The company’s Crunch, Butterfinger, BabyRuth and other chocolate bars have underperformed in the market.

Last week the company also said to be selling its Australian chocolate bar Violet Crumble.