Swiss food and beverage giant Nestlé has agreed to buy Kraft Foods’ frozen pizza business in the United States and Canada for $3.7 billion (SFr3.8 billion).
The deal secures Nestlé’s solid footing in the US market, the largest pizza market in the world. Kraft Foods is the leader in the frozen pizza category with estimated sales of $2.1 billion in 2009 and has enjoyed double-digit growth in the US and Canada over the past four years.
It follows Monday’s announcement that Nestlé was selling its stake in the US eye-care concern Alcon to Swiss pharmaceutical group Novartis for a total of $38.5 billion.
Nestlé said the deal with Kraft Foods provided a “new strategic pillar” to its frozen food portfolio in North America and put the group in a prime position in the frozen pizza business where the group has only had a minor presence until now.
The transaction is subject to US and Canadian regulatory approval and is expected to be completed in 2010.
Also on Tuesday, Kraft Foods said it would use the full net proceeds of the deal to fund a hostile £10 billion (SFr16.6 billion) takeover offer of British chocolate maker Cadbury. Nestlé ruled itself out of a potential bidding war for the confectioner.
swissinfo.ch and agencies