LONDON/ZURICH Food group Nestle NESN.VX is selling its sports nutrition business under the PowerBar and Musashi brands to U.S. group Post Holdings (POST.N), the Swiss company said, in its drive to shed underperforming assets.
The world's biggest food company is reviewing its portfolio to identify brands to be improved or sold, having already offloaded the bulk of its Jenny Craig weight-loss business in November.
Several consumer goods companies are pruning their portfolios as faltering economies have made trading more difficult worldwide. Moody's Investors Service said in a recent report that these reviews could lead to a wave of mergers and acquisitions among food producers.
"We have an ongoing process of portfolio review and this decision came out of that," a Nestle spokeswoman said in an emailed statement. "The divestment allows Nestle Nutrition to focus more closely on the core elements of our business."
She declined to reveal the financial details, but Kepler Chevreux analyst Jon Cox estimates that Powerbar and Musashi have combined annual sales of about 200 million Swiss francs ($220.8 million).
"As a result, Post Holdings potentially paid up to 400 million Swiss francs for the businesses," he said.
Reuters reported in September that Nestle was looking to sell its PowerBar brand.
A statement from Post Holdings said that the company expects the acquisition to boost sales in its active nutrition business to about $550 million a year. It added that it expects to fund the acquisition from cash reserves.
Nestle reports full-year results on February 13.
(Reporting by Silke Koltrowitz and Martinne Geller; Editing by David Goodman)