Nestle will buy Gerber for $5.5 billion
The famous Gerber Baby will change parents, with Nestle SA announcing Thursday that it will buy Gerber Products Co. for $5.5 billion, giving the world’s biggest food and drink company the largest share of the global baby food market.
The acquisition from pharmaceutical maker Novartis SA helps further Nestle’s recent focus on health and nutrition, following its purchases of the U.S. weight control company Jenny Craig and Novartis Medical Nutrition.
Nestle, which owns brands such as Nescafe, Perrier and Dreyer’s, is also 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 cherubic face of the happy Gerber infant dominates the U.S. baby-food market, with the company holding a 79 percent share, according to Morgan Stanley.
“Adding Gerber will help the company’s nutrition business generate annual sales of close to $8.2 billion. The company said it expects Gerber to generate sales of around $1.95 billion this year and a 10 percent sales growth in the long run.
•Apple Inc. said it won’t be shipping its next-generation operating system in June as planned, saying it had to divert resources from the project so that it could launch its highly anticipated iPhone on time.
The new shipment date for Mac OS X “Leopard” will be in October, the company said Thursday. The iPhone will make its debut in June as planned.
Apple shares dropped nearly 3 percent to $89.50 in extended-session trading after the announcement. Earlier, they had closed at $92.19, down 40 cents, on the Nasdaq Stock Market.
•Rite Aid Corp. on Thursday reported a small fourth-quarter profit that missed expectations, and the nation’s third-largest drugstore chain said it has agreed to divest two dozen stores in a deal for 1,850 Brooks and Eckerd stores that it expects to close in May.
Rite Aid said it agreed with Federal Trade Commission staff to shed the 24 stores in nine states as part of the acquisition. The move is expected to satisfy antitrust concerns. The commission still must approve the deal, and Rite Aid remains in talks with state attorneys general, which could yield more divestitures.
The deal is now expected to close by the end of May, after Rite Aid originally predicted a fourth-quarter close, meaning Rite Aid can only count on nine months of revenue from the Brooks and Eckerd stores in the new fiscal year.