Nestle SA's new chief executive officer is looking to spin off its US confectionery business as the company looks for growth from healthier and more profitable businesses.
Half a year after taking the helm at the Vevey, Switzerland-based company, Mark Schneider put brands like Butterfinger and BabyRuth up for sale late Thursday.
Nestle's shares were up as much as 2.8 per cent in Zurich trading as analysts said the move signaled that the new chief, with a background in health care, was looking to transform the company, struggling with slow growth.
''Looks like the start of a new era for Nestle,'' wrote Jean-Philippe Bertschy, an analyst at Bank Vontobel. He said the move to divest a unit whose brands also included Gobstopper and LaffyTaffy raised the possibility of strategic reviews of other underperforming businesses, such as the Herta processed-meat brand, US frozen foods, ice cream or pizza.
According to commentators, the review spearheaded by Schneider marked a departure from the approach of his predecessor as CEO, Paul Bulcke, who talked about selling ailing businesses but retained them in the hopes of revamping them.
Food companies are under pressure to cut costs after Kraft Heinz Co's failed bid for Unilever earlier this year which showed that even the largest players could become targets.
Nestle said Thursday that it will complete its review of strategic options for the business by the end of this year. Nestle added that the review did not affect its Toll House baking products in the US or Kit Kat overseas.
In the United States, Kit Kat was licensed to Hershey and is not part of Nestle's portfolio.