Nestle sells its U.S. confectionery business to Italy’s Ferrero for $2.8 billion

Swiss food group Nestle has agreed to sell its U.S. confectionery business to Italy’s Ferrero for $2.8 billion, marking its first big sale and a small step on its path towards healthier products.

For family-owned Ferrero, the cash deal offers a chance for the Italian company to build scale quickly in that key market, where it has done two other deals in the past year. The maker of Nutella spread and Ferrero Rocher pralines will become the third-largest chocolate company in the U.S. and globally.

For Nestle, a consumer shift away from junk and sugary foods has led the Swiss company to focus on “nutrition, health and wellness”.

The company is expanding into consumer health, bidding for the vitamin and supplements business being sold by Germany’s Merck after agreeing last month to buy vitamin maker Atrium Innovations.

Nestle paid $2.3 billion for Atrium, which has about $700 million in annual sales. The chocolate business, which it is selling for $2.8 billion, has about $900 million in sales.