Nestle SA, the world's largest food company, agreed to buy baby food brand Gerber from Swiss drugmaker Novartis AG for US$5.5 billion in cash to gain almost four-fifths of the US market for infant purees.
Nestle will add Gerber's annual sales of US$1.6 billion to its nutrition unit, which makes Jenny Craig diet food, the Vevey, Switzerland-based company said in a statement yesterday.
The maker of Neslac and Good Start infant formulas spent almost US$4 billion last year buying nutrition brands with sales growth surpassing the rest of the food industry, including a Novartis unit that makes enriched meals for the sick.
"This is a reasonable price," said Karl-Heinz Scheunemann, an analyst at Bankhaus Metzler in Frankfurt, Germany.
Gerber was founded in the US in 1928 by Daniel Gerber, who began mass-producing strained fruit for infants at a cannery.
Gerber, known for the baby appearing on its jar labels, is based in Parsippany, New Jersey and "recognized by virtually all mothers in the US," Nestle says.
It sells 190 products in 80 countries, and had an operating profit of US$307 million last year.
"This transaction is the right move for Gerber, as it will become a priority business in a leading global nutrition company," Novartis CEO Daniel Vasella said in a statement sent by the Basel-based drugmaker.
The transaction will close in the second half and is subject to regulatory approval, the companies said.
Novartis is left with contact-lens maker Ciba Vision as the only business not making drugs or vaccines now.
Ciba is not a "core business," Novartis spokesman John Gilardi said yesterday.
Before selling its hospital-food unit for US$2.5 billion to Nestle in December, Novartis sold off a division that makes Isostar energy drinks to ABN Amro Holding NV for US$271 million.
Sales of nutritional foods are increasing by as much as 8 percent each year, compared with between 1 percent and 2 percent for the broader food market, according to European broker Kepler Equities.
Buying Gerber will give Nestle 79 percent of the US baby-food market, according to Morgan Stanley.
Full-year sales of Nestle's nutrition foods, which include PowerBar energy snacks and Clinutren products, rose 6.1 percent at constant currencies to almost 6 billion Swiss francs (US$4.9 billion).
The profit margin is 16.9 percent for the unit, compared with 13.5 percent for the company overall.
The company does not break out its sales for baby food in its statistics.
‘HERO OF THE ERA’: President Tsai Ing-wen expressed deep sadness at Lee’s passing, and told the government to assist his family with all their needs Former president Lee Teng-hui (李登輝) passed away at 7:24pm yesterday at Taipei Veterans General Hospital. He was 97 years old. The hospital stated the cause of death as septic shock and multiple organ failure. Lee had been hospitalized there since February, when he choked on a mouthful of milk at home. He was later diagnosed with pulmonary infiltrates and aspiration pneumonia. The hospital said that Lee had been treated with antibiotics, but that his health had not improved, as his advanced age and diabetes had inhibited his immune system and led to recurring infections. During his hospitalization, Lee underwent daily kidney dialysis, which removed
‘WEAK POSITIVE’: The man arrived in Taiwan in May and was quarantined for two weeks, Chen Shih-chung said, adding that he might be infected a long time ago The government is considering tightening mask-wearing rules again in light of a potential domestic COVID-19 infection, Minister of Health and Welfare Chen Shih-chung (陳時中) said yesterday. The Central Epidemic Command Center (CECC) confirmed seven new COVID-19 cases, six of which are imported. The other case involves a Belgian engineer who entered Taiwan on May 3 and remained in quarantine until May 17, said Chen, who heads the CECC. Although the source of infection has yet to be identified, the case could end the nation’s record of not having any domestic cases in the previous 110 days. The Belgian, in his 20s, is a technician
ROAD TO HISTORY: When Lee Teng-hui joined the KMT, the likelihood of a Taiwanese becoming ROC president, much less its first directly elected one, was hard to imagine Lee Teng-hui (李登輝), who was born on Jan. 15, 1923, in the farming community of Sanshi Village, Taihoku Prefecture — now New Taipei City’s Sanzhi District (三芝) — during the Japanese colonial era, and rose to become mayor of Taipei and not only the Republic of China’s (ROC) first Taiwan-born president, but its first directly elected one as well. Educated in the Japanese educational system of the time, Lee, who spoke Japanese, Hoklo (also known as Taiwanese), Mandarin and English, won a scholarship to Kyoto Imperial University, but his studies were interrupted by World War II. He earned a bachelor’s
BRIBERY CASE: President Tsai Ing-wen accepted Su Jia-chyuan’s resignation as he said that he deeply regretted causing trouble for the president due to the investigation Presidential Office Secretary-General Su Jia-chyuan (蘇嘉全) yesterday resigned after his nephew, Democratic Progressive Party (DPP) Legislator Su Chen-ching (蘇震清), was implicated in a bribery case related to a dispute over the ownership of Pacific Sogo Department Store (太平洋崇光百貨). “I resigned from the post so that President Tsai Ing-wen (蔡英文) would not be bothered by it anymore, and the prosecutors can investigate the case in a fair and just manner. I thank President Tsai once again for supporting me. May the country continue to prosper under her leadership,” Su Jia-chyuan said in a statement. The Presidential Office said that Tsai has accepted