Nestle said to buy Gerber business for $5 billion
Wednesday April 11, 5:40 pm ET
LONDON (Reuters) - Nestle SA (VTX:NESN.VX - News) is expected to announce a $5 billion deal to acquire baby-food maker Gerber, a household name in the United States, from Novartis AG (VTX:NOVN.VX - News), sources familiar with the situation said on Wednesday.
An announcement is expected on Thursday, according to the sources, who requested anonymity.
Swiss-based Novartis, the world's fourth-biggest pharmaceuticals company, declined to comment. Nestle could not be reached immediately for comment.
Although Nestle is the world's biggest maker of infant nutritional products, it lacks a baby food brand in the U.S. and has been keen to buy Gerber for more than a decade.
In January, Nestle Chief Financial Officer Paul Polman reiterated that the company would be interested in Gerber if it was put up for sale.
Swiss-based Nestle, which makes Nescafe coffee, KitKat chocolate wafer bars and Perrier bottled water, first tried to buy Gerber in the early 1990s, but lost out to Sandoz, which later became part of Novartis.
An acquisition of Gerber would continue Nestle's push into health and nutrition. Nestle recently bought the medical nutrition business of Novartis for $2.5 billion, but that deal did not include Gerber.
A Nestle purchase of Gerber has been widely expected by analysts, who predicted the unit would fetch in the range of $5 billion to $6 billion.
In January, Novartis said it was under no pressure to sell Gerber. The sale, however, will allow the company to focus on its core drugs business, sources said.
Novartis makes drugs such as Diovan for hypertension and Glivec for leukemia.
biz.yahoo.com |
