ZURICH (Reuters) - The world’s biggest food group Nestle NESN.VX said it had sufficient scale in confectionery and only expected small buys, having ruled out rivaling Kraft Foods’ KFT.N bid for British chocolate maker Cadbury CBRY.L.
Chief Financial Officer Jim Singh told a conference call that with 2008 confectionery sales of more than 12 billion Swiss francs ($11.61 billion) and top brands in many markets, the business was performing competitively across the world.
“We believe we have sufficient size and scale that will allow us to continue to complete regardless of what happens in our industry segment,” Singh said.
Nestle effectively helped Kraft sweeten its hostile bid for Cadbury on Tuesday by buying its North American frozen pizza business for $3.7 billion.
The maker of Nescafe coffee, KitKat chocolate bars and Maggi soup also ruled out on Tuesday making or participating in any formal bid for Cadbury, raising Kraft’s chances of success against potential rivals Hershey (HSY.N) and Italy’s Ferrero.
Singh declined to comment any further on that statement other than saying that Nestle only planned smaller, bolt-on deals in confectionery that were very geographically specific rather than targeting large global brands.
There had been speculation that Nestle might help Hershey fund a counterbid by buying its U.S. KitKat license.
Singh also said that despite the big North American pizza buy, emerging markets were Nestle’s priority for future acquisitions, though deals there were smaller and took longer to execute and the firm would still invest in developed markets.
Nestle’s acquisition strategy has been in focus since it sold a 52 percent stake in eyecare group Alcon ACL.N to Novartis NOVN.VX for $28.1 billion on Monday.
Singh said Nestle would not stop looking for bolt-on buys this year just because it had already exceeded its annual guidance for acquisitions of 2-3 billion francs with the Kraft pizza business.
“Whenever there is an opportunity that allows us to enhance our business, we will do that,” he said.
(Reporting by Emma Thomasson, editing by Will Waterman)
$1=1.034 Swiss Franc