Nestlé announces sale of Food Ingredients to Givaudan

Nestle announced today the sale of its Food Ingredients Specialties (FIS) to flavouring company Givaudan.

Givaudan, one of the biggest makers of flavourings, will take over FIS, formerly wholly owned by the Nestle Group, and its subsidiaries in Châtel-Saint-Denis.

The transaction, valued at CHF 750 million, will be paid in Givaudan shares and cash. Nestlé will take an equity interest in Givaudan S.A.

Peter Brabeck-Letmathe, CEO of Nestlé, the world's largest foodmaker, said: "This move emphasises our determination to concentrate on our consumer businesses while providing FIS with even better prospectives for development with Givaudan. Taking a minority share in Givaudan constitutes a solid base for a long-term relationship between the two companies."​

Over the past 30 years, FIS has developed flavouring agents for products such as soups, sauces and prepared dishes, with a focus on savoury flavours. Its sales have grown to about CHF 400 million.

Bloomberg reports that Nestle has been selling off businesses such as Findus frozen foods, cocoa plants and other units in order to invest in brands such as Nestle and Maggi, and make purchases in mineral water, pet food and ice cream, considered to be high-growth areas.

Today's agreement will bring together the FIS experience in the savoury sector and Givaudan's specialty in sweet and concentrated flavours.

After a one-year transition period, all dehydrated culinary products sold by Nestlé in Switzerland under the Maggi brand will be sourced from the Group's other European factories.

The factory in Kemptthal, the only FIS industrial asset in Switzerland, will be merged into Givaudan's operation. The Product Technology Center in Kemptthal, part of Nestlé's worldwide R&D function, is not affected by the transaction.