Nestle is getting out of the candy business. According to multiple reports, the food and beverage manufacturer is selling its U.S. candy business to Italy's Ferrero Group for $2.8 billion in cash. Ferrero is the company behind the delicate Ferrero Rocher foiled-covered confections with chocolate-covered hazelnuts.
Nestle suggested last year that the candy business may be on the block, when it said that it wanted to focus on areas with larger growth potential, including coffee, pet care, and infant nutrition.
Nestle's candy business did about $900 million in sales in 2016, which translates to a lot of Oh Henry! bars. The company is known for its Baby Ruth, Butterfinger, and Crunch Bars, and most people want to assurances that nothing is lost when you hand the keys to SweeTarts and Nerds to the company behind Tic Tacs and Nutella.
As part of the acquisition, Ferrero will take over U.S. manufacturing facilities in Bloomington, Franklin Park, and Itasca, Illinois as well as the candy-related employees. According to Ferrero, it will also continue operations at the Glendale, California offices, as well as other locations in Illinois and New Jersey.
Nestle has sold milk chocolate since the 1880s, but it has struggled behind Hershey, Mars, and Lindt in the U.S. in recent years. The sale is a significant move as the company shifts toward more healthy and nutritious foods.
With this acquisition, Ferrero will reportedly become the third-largest chocolate company in the U.S., a market that did an estimated $22.4 billion in sales in 2017, according to Statista.