Nestlé To Sell Spanish Food Operation

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Nestlé To Sell Spanish Food Operation

As part of its ongoing portfolio review, Nestlé Spain has announced the signing of an agreement to sell La Cocinera frozen ready to eat meals business to Findus Spain

Nestlé SA said Thursday it was selling a piece of its Spanish frozen food operation, part of the Swiss food giant's move to hive off fringe businesses.

Nestlé, based in Vevey, Switzerland, said it was selling the La Cocinera brand to Findus Group, which specializes in prepared meals. The deal includes a factory in northern Spain that makes ready-to-eat frozen meals, including lasagna, pies and cheese nuggets, that employs 200 people.

Nestlé didn't disclose the sales price. The deal is subject to approval by Spanish competition authorities.

The La Cocinera transaction comes as Nestlé, the world's largest food company by sales,moves to sell off parts of its businessesto concentrate on its larger and more-profitable operations, including its pet-care and nutritional-product divisions.

Nestléis exploring the sale of Davigel, a frozen-food subsidiary that makes meals and desserts for restaurants and schools. In the past 18 months, the company has also agreed tosell its PowerBar athletic bar businessandmost of its Jenny Craig diet food business.

Prepared foods, which includes frozen products such as those made by La Cocinera, have been a sore spot for Nestlé. Sales dropped 6.2% in the nine months to Sept. 30, as consumers shunned frozen products in favor of fresh produce.

Some analysts said the sale of La Cocinera showed Nestlé was committed to restructuring its business portfolio.

"This shows Nestlé is serious when they say they are looking at laggards and underperformers," said Jon Cox, an analyst at Kepler Cheuvreux in Zurich. Mr. Cox said he expected Nestlé to continue divesting businesses it can't turn around or which no longer fit into the company. Nestlé also didn't disclose sales for La Cocinera, but said the factory produced 15,000 metric tons of frozen food in 2014. In midafternoon trading, Nestlé shares were 1.2% higher at 72.40 Swiss francs.

Source: The Wall Street Journal

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