Nestle to Buy Gerber for $5.5 Billion

To reinforce its leadership in nutrition, Nestle agrees to acquire Gerber, the iconic U.S. baby food brand, from Novartis for $5.5 billion. The move elevates Nestle the No. 1 position in the world's largest single baby food market -- the United States -- and establishes Nestle Nutrition as the global leader in this sector.

With net proceeds of sales for 2007 estimated at $1.95 billion, Gerber is among the most trusted U.S. brands and enjoys strong positions in Mexico, Poland and Central America. Gerber is also a provider of baby care products and juvenile life insurance in the United States.

"The acquisition of Gerber is the perfect complementary fit. 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, with annual sales of around CHF 10 billion, covering all important sectors: infant formula, baby food, medical nutrition, weight management and performance nutrition," says Peter Brabeck-Letmathe, Chairman and CEO of Nestle. "This is a major step in the transformational journey of Nestle toward a Nutrition, Health and Wellness Company. It is my great pleasure to welcome the employees of Gerber to the Nestle Group."

The transaction, which is expected to be completed by the second half of 2007, also marks the end of Novartis' transition to a group focused 100 percent on healthcare, with pharmaceuticals at the core.

"Over the past decade we have continuously invested in R&D, strengthening our innovation power and building our healthcare businesses, particularly pharmaceuticals, while divesting over 50 percent of our non-core, non-healthcare businesses," says Dr. Daniel Vasella, chairman and CEO of Novartis. "This transaction is also the right move for Gerber, as it will become a priority business in a leading global nutrition company."