Nestle Nutrition acquisitions continue with Gerber

By Stephen Daniells

- Last updated on GMT

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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