By John Revill
ZURICH--Nestle S.A. (NESN.VX) is selling its entire 10% stake in
flavors and fragrances maker Givaudan S.A. (GIVN.VX) valued at
nearly 1.2 billion Swiss francs ($1.3 billion) as the Swiss food
giant pushes ahead with a streamlining effort.
Nestle, the world's biggest food company by revenue, said shares
are being sold not in the open market but through a private
placement to institutional investors such as pension funds. Goldman
Sachs is arranging the sale.
Nestle, the maker of KitKat chocolate bars and Nescafe instant
coffee, is one of Givaudan's biggest customers for food flavorings.
Nestle acquired its stake when it sold the food ingredient company
FIS to Givaudan for a combination of cash and stock in 2002.
"Nestle has been very satisfied with its holding but believes
now is the appropriate time to divest," the company said in a
statement.
The sale comes as Nestle looks to offload underperforming
businesses. The company is currently carrying out a review of its
nearly 2,000 business units, and has already sold most of its Jenny
Craig weight management business for an undisclosed sum.
Nestle holds 926,562 Givaudan shares, a stake valued at 1.145
billion Swiss francs, or $1.28 billion.
A spokesman for Givaudan declined to comment on the sale.
Shares in Givaudan fell 3.7% after Nestle's announcement, to
trade at 1190.0 at 935GMT, underperforming the Swiss market, which
was 0.4% higher.
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