As part of the continuing drive to reinforce its leadership in nutrition, Nestlé has agreed to acquire Gerber, the iconic US baby food brand, from Novartis for a total amount of USD 5.5 billion. The move gives Nestlé the number one position in the world's largest single baby food market, the USA, and clearly establishes Nestlé Nutrition as the global leader in this sector. With this acquisition, Nestlé Nutrition will also leverage its existing strong core business in North America, giving the company significant scale in infant, healthcare and performance nutrition with a dedicated and focused sales force.
With net proceeds of sales for 2007 estimated at USD 1.95 billion, Gerber is among the most trusted US brands – recognized by virtually all mothers in the USA – and, furthermore, enjoys strong positions in Mexico, Poland and Central America. Gerber is also a provider of baby care products and juvenile life insurance in the US. The company has enjoyed good growth in recent years and, as a result of expected cost synergies, further improvement of operational margins is expected.
The acquisition of Gerber, which comes in the wake of the Jenny Craig and Novartis Medical Nutrition purchases, will transform Nestlé Nutrition into a business approaching CHF 10 billion in sales with an enhanced critical mass and access to the Group's global R&D network to drive innovation.
The transaction, which is expected to be completed during the second half of 2007, is subject to regulatory approval.
Peter Brabeck-Letmathe, Chairman and CEO of Nestlé, said: "The acquisition of Gerber is the perfect complementary fit. 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, with annual sales of around CHF 10 billion, covering all important sectors: infant formula, baby food, medical nutrition, weight management and performance nutrition. This is a major step in the transformational journey of Nestlé toward a Nutrition, Health and Wellness Company. It is my great pleasure to welcome the employees of Gerber to the Nestlé Group."
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