Nestle has long been one of the biggest names in the candy industry in the United States, but that’s about to change. According to USA Today, the company is preparing to sell its U.S. confectionery business to the Italian chocolate and candy conglomerate Ferrero for an estimated $2.8 billion. The brand behind Crunch, Butterfinger, Baby Ruth, Raisinets and more is now moving in a new direction.
This will be a major pivot for Nestle. The company sold about $900 million worth of candy in 2016, but it’s now making plans to move away from the confectionery sector and focus on other types of food products. Nestle also owns Purina, Coffee-Mate, Gerber, Stouffer’s, and a number of other popular brands, and it also just purchased coffee retailer Blue Bottle Coffee.
“This move allows Nestle to invest and innovate across a range of categories where we see strong future growth and hold leadership positions—such as pet care, bottled water, coffee, frozen meals, and infant nutrition,” Nestle CEO Mark Schneider said.
For Ferrero, this is a big acquisition. The Italian conglomerate is about to become the third-largest seller of chocolate candy in the world, according to market research from Euromonitor International. Ferrero already owns popular brands like Nutella and Tic Tacs, and this new deal will only add to the company’s influence in the industry.
“We are very excited about the acquisition of Nestle’s U.S. confectionery business, which has an outstanding portfolio of iconic brands with rich histories and tremendous awareness,” Ferrero Group executive chairman Giovanni Ferrero said.
Both companies have long histories in the world of sweets. Nestle began selling chocolate in 1904 and has been going strong ever since; Ferrero has been steadily growing since its origins as a pastry shop in 1946. For both, the next chapter is set to begin soon. The sale of Nestle’s candy brands to Ferrero is expected to be completed near the end of the first quarter of 2018.