Food giant Nestle plans to pick a buyer for its U.S. chocolate business by the end of this week, three sources close to the matter said on Wednesday, in a deal expected to top $2.5 billion.
Italy’s Ferrero is seen as a front-runner, according to several other sources, who said that the maker of the Nutella spread was keen to boost its presence in the U.S. market, following last year’s purchase of the U.S. groups Ferrara and Fannie May.
One source said Ferrero raised its offer for Nestle’s business last week in an attempt to outbid rival Hershey.
“(Executive Chairman) Giovanni Ferrero is really committed to the deal, that’s why the group sweetened its offer to something in the area of $2.5 billion,” the source said.
Nestle and Ferrero declined to comment, Hershey was not immediately available for comment.
If successful, the deal would make Ferrero the third-biggest confectioner in the United States after Mars Inc. and Hershey, according market research provider Euromonitor.
Nestle in June said it was exploring strategic options for the business, which includes candy bar brands such as Butterfinger and Baby Ruth, and had sales of more than $900 million in 2016. It is keeping the rest of the global business, which includes KitKat and Aero.
Ferrero, which also makes Ferrero Rocher pralines and Kinder chocolate eggs, is run by Giovanni Ferrero, whose grandfather founded the firm in 1946 in the small Italian town of Alba, in Piedmont.
For many years Ferrero relied on internal growth but began making acquisitions after Giovanni became the company’s sole CEO in 2011 following the death of his brother.
By Francesca Landini, Martinne Geller, Pamela Barbaglia and Harry Brumpton
A new wave of brands is emerging that promotes indulgence and rejects the notion of sacrifice. Low-maintenance “hangover” beauty products are designed to address the effects of late nights and partying without judgment or hassle, and even include cosmetics that are formulated in a way that means you can fall asleep in your makeup without feeling guilty.
The pilot will allow the company to scale circular packaging in about 18 markets over the next three years, an approach that jumps on the success of similar efforts in the company’s Indonesia ecoSPIRITS program, which launched in 2022 and is active in 38 bars.
Unilever’s focus on purpose across its brands has been a source of criticism from some of its investors. Its new CEO Hein Schumacher says the company now recognises there are some brands where the concept is simply not relevant.