Nestle to buy Gerber
VEVEY, Switzerland - Nestle SA announced Thursday that it will buy baby-food maker Gerber Products Co. from pharmaceutical giant Novartis for $5.5 billion, pushing it to No. 1 in the world's baby food market.
Ref. https://news.yahoo.com/s/ap/20070412/ap_on_...e/nestle_gerber
These are two known companies with a good reputation so if they do merge successfully it can only magnify their business earnings, but I do wonder if they will each keep their respective names for the current products?
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There have been quite a lot of mergers and acquisitions lately, this may be one of the biggest in the regular news.
Both names are very well known, but it seems odd to have a candy maker in charge of baby food -- but perhaps not as odd as a pharmaceutical corporation!
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I would not say that Nestle is all about candy, in fact they already have their own line of baby cereal, milks and powders for growing children and many other basic food products. Maybe having Gerber will allow them to push their child production further.
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It is a smart move. If you want to take a large market share, team up with someone that already has it. Nestle was WAY bigger than Gerber and it was a easy acquisition. They are buying a well respected and probably number 1 name in baby food and products. They are familiar with the food aspect of the business. The only thing that might be interesting is the managing of some of the other products (non-food related) that Gerber produced. This may be a challenge but I am sure that Nestle is big enough to solve it or decide to spin off sections of Gerber that they may not want to manage. This would include Gerber's insurance, children's wear and baby supplies (other than food).
It is really smart when you think about how we are hopefully moving our diets to more healthy foods. The candy industry will never go away, but might have seen its peak.
Edited: Vincenzo on 20th Apr, 2007 - 10:08am
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