Nestle Nutrition acquisitions continue with Gerber

By Stephen Daniells

- Last updated on GMT

Related tags: Nestlé, Nutrition, Health

Swiss food giant Nestlé has acquired iconic US baby food brand
Gerber as the group's transition to a nutrition, health and
wellness company continues.

The acquisition, expected to be finalised during the second half of 2007 and subject to regulatory approval, will see Nestlé handing over $5.5bn to Novartis for Gerber. The move comes less than a year after snapping up Jenny Craig, Australian cereal business Uncle Tobys and Novartis Medical Nutrition, and is a further sign of the group's transition towards a healthier profile in line with consumer demand. "The acquisition of Gerber is the perfect complementary fit,"​ said Peter Brabeck-Letmathe, chairman and CEO of Nestlé. "It not only gives Nestlé the leadership position in baby food, but it also constitutes a decisive step to establish Nestlé Nutrition as the undisputed global leader in the nutrition field… covering all important sectors: infant formula, baby food, medical nutrition, weight management and performance nutrition,"​ he said. "This is a major step in the trans-formational journey of Nestlé toward a nutrition, health and wellness company,"​ added Brabeck-Letmathe. Nestlé Nutrition is an autonomous unit within the group, and it already has a global presence in infant nutrition, health care nutrition and performance nutrition. For the first nine months of the current fiscal year the nutrition unit reported sales of CHF4.3m (€2.7m), up from CHF 3.8m (€2.4m) for the prior year period. According to Nestlé Nutrition, the acquisition will transform the unit into a business approaching CHF10bn (€6.1bn) in sales. "The move gives Nestlé the number one position in the world's largest single baby food market, the USA,"​ said the company. Gerber is reported to be one of the most trusted brands amongst consumers in the US. Net proceeds of sales are estimated to approach $2 bn for 2007. The company also enjoys strong positions in Mexico, Poland and Central America. Nestlé recently exceeded financial expectations with full-year organic growth boosted by the company's focus on nutrition, research and core brands. Sales at the group rose to CHF98.5bn (€60.5bn) while organic growth was 6.2 per cent and net profit was up 13.8 per cent to CHF9.2bn (€5.6bn). In addition, Nestlé increased its marketing and administration spend by 6.3 per cent last year as well as upping its investment in research and development 16 per cent to CHF1.7 bn (€1.04bn).

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