Posts Tagged ‘Nestle’
DOWNTOWN — Nestle fueled speculation about a shift in the global confectionary market Tuesday after it announced a $3.7-billion deal that would put its Glendale-based USA division in charge of major frozen pizza brands to be acquired from Kraft Foods.
The agreement, which would involve a cash purchase of North American frozen pizza labels DiGiorno, Tombstone, California Pizza Kitchen, Jack’s and Delissio, came as Kraft is preparing to sweeten its third offer to purchase British candy maker Cadbury.
Nestle’s proposed purchase of the pizza businesses, which is pending approval from Canadian and American regulatory authorities, will give Kraft additional cash resources as it bids for Cadbury.
Nestle said Tuesday it would not pursue or participate in a deal to purchase the British confectioner.
The agreement with Kraft comes a day after Nestle announced it would sell its 52% stake in Swiss ophthalmology firm Alcon for about $28 billion.
Combined, the moves will allow Switzerland-based Nestle to refocus on its food and beverage operations, the firm said.
“The acquisition brings leadership in the frozen pizza category, where Nestle only had a minor presence until now, and builds on Nestle’s existing pizza know-how and operations in Europe,” the firm said in a statement.
Glendale-based Nestle USA expects to run out of its popular Libby’s canned pumpkin product ahead of Thanksgiving because of flooding that devastated farms in Morton, Illinois, the “pumpkin capital of the world,” the company said in a statement.
Nestle, which dominates sales for the canned goods, controlling about 85% of the market by most estimates, will fall short of meeting its delivery goals in time for meeting Thanksgiving demand for the key ingredient used in pumpkin pies, the company said.
Heavy rains during the 13-week harvest were to blame for the shortage, the company said.
“If only we could have changed the weather,” Paul Bakus, vice president and general manager of Nestle baking, said in a statement.
Although Nestle expanded its farms in 2008, “this year, heavy rains saturated the pumpkin fields, making it nearly impossible for tractors and other equipment to operate,” the company said.
From the Nestle statement:
As a result of the weather and the company’s commitment to picking and packing only quality fruit, the 2009 inventory of canned pumpkin will be smaller than planned. Nestle is continuing to ship the last of the already canned inventory. When it is gone, there will be no more pumpkin available until the 2010 harvest. This is why the company believes a shortage of Libby’s pumpkin is likely.