24.07.2017

Lemonheads owner Ferrara eyes Nestle's candy business

Ferrara Candy Co, the owner of candies such as Lemonheads and Now & Later chews, is preparing to participate in the auction for Swiss food group Nestle SA's U.S. candy business, people familiar with the matter said on Friday. A potential deal would add chocolate brands such as Butterfinger and Baby Ruth to Ferrara's array of gum and soft-candy offerings.

Nestle said in June it would explore strategic options, including a possible sale, for its U.S. candy business, whose brands also include Nips, SweeTarts and Raisinets. Analysts at Jefferies peg its value at between US$1.5 billion and US$2 billion.

Nestle, the world's largest packaged foods maker, has been acting to shed underperforming businesses. U.S. activist shareholder Third Point LLC, which has a US$3.5 billion stake in the company, is pressuring Nestle to boost returns as demand for its products weakens. The business for sale has annual sales of 900 million Swiss francs (US$923 million).

It is the No. 4 player in the U.S chocolate and candy industry market, behind Hershey Co , Mars Inc and Lindt , according to Bernstein Research.


Related News