Nestle acquires Novartis nutrition food unit for $2.5 billion

15 December 2006

Mumbai: Nestle SA, the world''s largest food and beverage group, will acquire the medical nutrition unit of pharmaceutical group Novartis AG for $2.5 billion, the companies said in a release.

Nestle will acquire Novartis'' nutritional supplement brands like Boost and Resource, and Optifast dieting products. Media reports had earlier said that Nestle might also acquire Gerber Products, Novartis'' baby-food unit.

However, the deal does not include the Gerber unit.

The transaction is subject to regulatory approvals and is Nestle expects it to be completed during the second half of 2007.

The deal will propel Swiss-based Nestle to the No.2 position globally in the fast-growing niche business of providing specialised food to hospital patients. Nestle has been moving steadily toward high-margin, value-added food production in addition to its core operations in food staples.

The nutrition unit sale comes close on the heels of Nestle''s $600-million purchase of US food company Jenny Craig, which makes a range of food products and services such as weight management programmes.