Nestle Explores Options Including Alliance for Davigel Food Unit
Nov. 14 (Bloomberg) — Nestle SA, the world’s biggest food company, is seeking a partner for its Davigel European frozen- products unit as it explores strategic options for the business.
Nestle is “mainly” looking for an alliance to help Davigel to grow and protect the “best interests” of employees, clients and shareholders, the Vevey, Switzerland-based company said in a statement today. Reuters said in February that Nestle was exploring a sale of the unit, which also sells chilled food and ice cream, for about 300 million euros ($374 million).
Since Chief Executive Officer Paul Bulcke said last year that the company will fix or sell laggards, Nestle has jettisoned brands such as Juicy Juice fruit drinks and PowerBar snacks and ramped up investment in areas such as skin care.
“I assume Nestle will look to sell the Davigel unit,” Patrik Schwendimann, an analyst at Zuercher Kantonalbank AG in Zurich, said by phone. “Investors will be happy about it.”
Nestle has owned Davigel since it bought the unit’s parent company, pasta and pizza maker Buitoni in the late 1980s. Nestle announced a 40 million-euro investment to expand a French Davigel factory in April 2013. The unit had sales of 783 million euros in 2012.
The KitKat chocolate maker will probably keep its U.S. frozen-meal business, even as sales have dropped in recent years, Schwendimann said.
The company isn’t giving up on its Hot Pockets and Lean Cuisine meals and instead will update them with more organic ingredients and a wider choice of low-calorie dishes, Bulcke said in an interview Oct. 22.
To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net Thomas Mulier, Tom Lavell
