Nestle Spurs Growth in its U.S. Frozen Food Business with Acquisition

VEVEY, Switzerland - Nestle today said it will acquire the assets of Chef America Inc., the leading U.S. manufacturer and marketer of frozen hand-held food products, for $2.6 billion in cash.

The news came as speculation builds that Nestle is a prospective buyer of Hershey Foods, the largest U.S. candy maker, in a deal that could be worth $10 billion.

Chef America's brand names, Hot Pockets, Lean Pockets and Croissant Pockets, hold a 50 percent grocery channel market share of the fast-growing frozen hand-held category, according to Nestle. Denver, Colo.-based Chef America, which is privately held, expects sales of $720 million in 2002 -- an increase of more than 15 percent on last year.

"Chef America is an ideal and strategically important complement to our own frozen food activities in the USA, which include Stouffer's and Lean Cuisine," said Peter Brabeck, CEO of Nestle. "I am very pleased to see Chef America's innovative, high-growth and high-margin business joining us, giving Nestle the lead in two out of three principal categories in the world's largest frozen food market."

Nestle said the deal required regulatory approval but it hoped to complete the purchase within 60 days.
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