Nestle SA announced today that it will buy baby-food maker Gerber Products Co. from pharmaceutical giant Novartis for $5.5 billion, pushing it to Number one in the world's baby food market. According the Associated Press, the deal is expected to be completed during the second half of 2007, subject to approval by regulatory authorities, said Nestle, the world's biggest food and drink company. Gerber dominates the baby-food market in the United States, with a 79 percent share, according to Morgan Stanley. Nestle is the world's largest manufacturer of infant nutritional products - largely through its leading positions in developing countries such as Brazil and China - but had no presence in baby food in the United States. The company said it expects Gerber to generate sales of around $1.95 billion this year. The acquisition of Gerber, which follows Nestle's purchases of the U.S. health care and weight control company Jenny Craig and Novartis Medical Nutrition, will help the company's nutrition business to generate sales of close to $8.2 billion. "The acquisition of Gerber is the perfect complementary fit," said Peter Brabeck-Letmathe, Nestle chairman and chief executive officer. "It not only gives Nestle the leadership position in baby food, but it also constitutes a decisive step to establish Nestle Nutrition as the undisputed global leader in the nutrition field." Nestle shares were up 0.1 percent at 490 francs ($402.10) in Zurich trading. Novartis shares were flat at 67.10 francs ($55.06). -- SPA
