Nestlé has agreed to acquire Gerber, the US baby food brand, from Novartis for $5.5 billion.
The move positions Nestlé as the number one company in the world’s largest single baby food market – the US – and establishes Nestlé Nutrition as the global leader in the sector.
With net proceeds of sales for 2007 estimated at $1.95 billion, Gerber also enjoys strong positions in Mexico, Poland and Central America as well as the US. Gerber is also a provider of baby care products and juvenile life insurance in the US.
The acquisition of Gerber by Nestlé, which comes in the wake of the Jenny Craig and Novartis Medical Nutrition purchases, will transform Nestlé Nutrition into a business approaching $8.25 billion in sales.
The deal completes Novartis’ divestiture program following its strategy to focus on healthcare with pharmaceuticals at the core.
The transaction, which requires customary regulatory approvals, is expected to be completed by the second half of 2007.