Nestle Cuts the Meat in Bid to Build Healthier Food Giant
Bloomberg (02/14/19) Gretler, Corinne
Nestle SA's (NSRGY) troubled Herta lunch-meat business will be sold as CEO Mark Schneider attempts to boost sales growth through acquisitions and divestments. The world's largest food company saw its shares rise as much as 3.7% to a record as it forecast improved sales. The Swiss company also said it would cede control of its dermatology unit by the middle of the year. Under pressure from investor Dan Loeb, Nestle forecast 700 million francs of restructuring costs this year. Further, the company is accelerating its share buyback to complete the 20 billion-franc program six months early. Schneider indicated that the company is not excluding further mergers or acquisitions. "Acquisitions could easily be financed," he said. "We have strong cash generation, and one of the strongest balance sheets in the industry." Meanwhile, after criticism from Loeb that the company's board lacks consumer-goods expertise, it proposed Dick Boer, former CEO of Dutch grocer Ahold (ADRN), and Dinesh Paliwal, CEO of car-stereo maker Harman, as new directors.
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