Nestle to acquire Gerber for $5.5 billion; eyes US expansion
12 Apr 2007
Mumbai: Nestle SA, the world''s largest
food company, will acquire baby US food brand Gerber from
Swiss drugmaker Novartis AG for $5.5 billion in cash.
Gerber, with annual sales of $1.6 billion, holds almost
four-fifths of the US market for infant purees.
Nestle will add Gerber''s annual sales to its nutrition
unit, which makes Jenny Craig diet food, the Vevey, Switzerland-based
company reported on its website.
The maker of Neslac and Good Start infant formulas spent
almost $4 billion last year buying nutrition brands with
sales growth surpassing the rest of the food industry,
including a Novartis unit that makes enriched meals for
the sick.
Based in Parsippany, New Jersey, Gerber was founded in
1928 by Daniel Gerber, who began mass-producing strained
fruit for infants at a cannery. Gerber currently sells
190 products in 80 countries, and had an operating profit
of $307 million last year.
The transaction is expected to close in the second half
of the year and is subject to regulatory approval, the
companies said.
Nestle''s
full-year nutrition food sales, which include PowerBar
energy snacks and Clinutren products, rose 6.1 per cent
at to almost 6 billion Swiss francs ($4.9 billion). The
profit margin is 16.9 per cent for the unit, compared
with 13.5 per cent for the company overall.