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(Bloomberg) -- Italian Nutella maker Ferrero SpA is nearing a deal to acquire Nestle SA’s U.S. confectionery business for about $2.8 billion, according to a person familiar with the matter.

An agreement could be signed as early as Sunday, the person said, asking not to be identified as the information is private. The business, which includes the Butterfinger and Baby Ruth brands, is suffering a decline in revenue and had sales of about 900 million francs ($915 million) in 2016.

Ferrero, which has traditionally shied away from acquisitions, is expanding its portfolio beyond Nutella hazelnut spread, Tic Tac candies and Ferrero Rocher chocolates. For Nestle, the world’s largest food company, this marks Chief Executive Officer Mark Schneider’s first major divestment and an initial step away from chocolate.

Nestle and Ferrero declined to comment.

The move shows closely held Ferrero is eyeing a bigger bite of the U.S. market after buying Ferrara Candy in December. That boosted its market share in that country to 4.8 percent.

Last month, Hershey Co., which has been named as one of the potential bidders, agreed to pay $921 million for Amplify Snack Brands Inc., to expand into popcorn and potato chips.

Nestle plans to focus on categories like coffee and pet food as the industry grapples with a drop in demand for sugary products. While the Swiss company has been moving toward healthier fare, it’s holding on to its prepared-dishes, ice cream and global confectionery businesses. Those product categories made up roughly 40 percent of total sales last year.

Nestle shares fell 1.4 percent Wednesday in Zurich.

The Swiss KitKat maker said in June it was considering options for the unit, and in December said it expected to sell the business in the first quarter of 2018.

(Updates with share price in penultimate paragraph.)

To contact the reporters on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net, Ruth David in London at rdavid9@bloomberg.net, Tommaso Ebhardt in Milan at tebhardt@bloomberg.net.

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Thomas Mulier

©2018 Bloomberg L.P.

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