Nestle S A : sells Yinlu business in China amid portfolio cleanup
November 25, 2020 at 02:00 am EST
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ZURICH (Reuters) - Nestle has agreed to sell its Yinlu peanut milk and canned rice porridge businesses in China to Food Wise Co Ltd, a company controlled by the family of Yinlu founder Chen Qingshui, the world's largest packaged food group said on Wednesday.
It gave no financial terms for the deal, which it expected to close by the end of this year.
Nestle has been ditching underperformers and put North American waters and Yinlu under strategic review.
The deal covers all of Yinlu's operations, including its five factories in Fujian, Anhui, Hubei, Shandong and Sichuan. Yinlu brands had sales of 700 million Swiss francs ($768 million) in 2019.
The transaction lets Nestle focus on key categories in China: infant nutrition, confectionery, coffee, culinary, dairy and petcare, it said, adding it remained fully committed to the greater China region, its second-largest market with sales of nearly 7 billion Swiss francs in 2019.
As part of the transaction, Nestle will retain its ready-to-drink (RTD) Nescafe coffee business and distribute the products across most of the greater China region.
Yinlu will continue to manufacture the Nescafe RTD products for Nestle and distribute the products in several provinces. Yinlu will continue to manufacture and sell Nestea products under licence from Nestle.
(Reporting by Michael Shields; Editing by Riham Alkousaa and Stephen Coates)
Nestlé S.A. is the world's leading agri-food group. Net sales break down by category of products as follows:
- powdered and liquid beverages (26.7%): soluble coffees (Nescafé and Starbucks brands), coffee in capsules (Nespresso), chocolate drinks (Nesquik, Milo, etc.), tea drinks (Nestea), etc.;
- pet food (20.3%): brands such as Purina, Friskies, Felix, etc.;
- pharmaceutical, nutrition and well-being products (16.4%): nutritional supplements (Resource, Boost, Nutren, Optifast, Peptamen brands, etc.), infant and maternal nutrition products (NAN, illuma, Cerelac, Nido, Gerber), ketogenic beverages (BrainXpert), (Nesquick, Fitness, Cheerios, Lion, etc.), etc.;
- ready meals and seasoning products (12.5%): frozen and chilled dishes (Lean Cuisine, Hot Pockets and Stouffer's brands), soups (Maggi), etc.;
- dairy products and ice cream (11.8%): powdered milk, sweetened condensed milk, yoghurt and cream desserts, ice cream (Nido, Nesvita, Carnation, La Laitière, Coffee Mate, Nestlé Ice Cream, Dreyers, Häagen-Dazs, Extrême brands, etc.);
- chocolates, sweets and biscuits (8.7%): Kit Kat, Smarties, Cailler, Terrafertil, etc. brands;
- bottled waters (3.6%): Nestlé Pure Life, Vittel, Perrier, S. Pellegrino, etc. brands.
Net sales are distributed geographically as follows: Switzerland (1.2%), France (3.8%), the United Kingdom (3.8%), Germany (2.4%), Europe (12.8%), the United States and Canada (35%), China (5.9%), Asia and Oceania (21.4%) and Latin America (13.7%).