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Nestlé (Swiss: NESN) said that it is considering "strategic options" that could include the sale of its U.S. confectionary business, which includes such brands as Butterfinger, Baby Ruth, Raisinets and the underappreciated 100 Grand. Not included are Nestlé Toll House baking products nor KitKat, the latter of which is made by Hershey in the U.S. The unit has annual sales of more than $900 million, and could be worth around $3 billion in a sale.
- Why it's the BFD: This divestiture attempt is reflective both of healthier American snacking habits, and also of Nestlé's own efforts in that direction. In fact, the company's new(ish) CEO is a former healthcare exec.
- What's not included: Nestle Toll House baking nor KitKat, the latter of which is made by Hershey in the U.S.
- Big question: Is it still a Nestlé Crunch bar if it's no longer made by Nestlé?
- Bottom line: "The projected compound annual growth rate for the next five years for both chocolate and sugar confectionery in North America is around 2 percent, according to Euromonitor International. And Nestle's business specifically experienced a decline in the first three months of the year and has lost market share. It only makes sense that it's ready to move on from this market, where margins trail its global average." ― Gillian Tan
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