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Hero takes a bite out of US baby-food market

Hero hopes to feed more American babies

(Keystone)

Swiss-based food group Hero has acquired the United States baby-food maker Beech-Nut Nutrition, making it the second-biggest supplier on the American market.

If the US competition authorities approve the deal, Hero's revenue from infant nutrition will double.

Beech-Nut has a 15-per-cent market share in the US. Its product portfolio counts around 180 articles.

The company is based in St Louis, Missouri. It was owned by Swiss food giant Nestlé between 1979 and 1987.

No details on the financial terms or conditions of the deal have been released.

Hero said on Monday that the transaction marks a further milestone in its strategy to build an international position on the infant nutrition market.

Hero CEO Stefan Heidenreich added that the acquisition was "consistent" with the company's goal to strengthen its position outside western Europe and offered new growth opportunities within the US and Canadian markets.

Improvement expected

The Beech-Nut acquisition means that Hero's revenues from infant nutrition should rise from 17 per cent to almost 30 per cent of overall revenue.

The latter has not been quoted on the Swiss stock market since 2003 and has been seeking to increase revenue from this sector during the past two years.

Last year, company profits dropped by two thirds to SFr20.1 million ($15.74 million) on sales of SFr1.359 billion.

Heidenrich, however, said he expected a "significant" improvement this year, due in part to the latest acquisition.

He admitted though that sales were still difficult in one of Hero's key markets, Germany.

He added that the company was still on the lookout for other takeovers.

"There are plenty of pretty girls we could get married to," he said.

The current number one on the US baby-food market is a firm called Gerber, which is owned by another Swiss company, Novartis.

swissinfo with agencies

Key facts

Hero employs 3,300 people in 15 countries, including 400 at its headquarters in Lenzburg, canton Aargau.
Germany's Schwartau Group is the main shareholder.
It is the fourth-biggest baby-food producer in Europe.
Profits declined by two-thirds last year, reaching SFr20.1 million for sales of SFr1.359 billion.

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