Frozen assets

5 January 2010 By Alexander Smith

The world’s largest food group is pocketing $28.1 billion by selling its stake in Alcon. Now Kraft’s bid for Cadbury has given Nestle the chance to nab a dominant slice of the North American frozen pizza market. Nestle remains in a strong position to pick up other choice assets.

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Nestle, the world's largest food company, has agreed to buy Kraft Foods' frozen pizza business for $3.7 billion. The acquisition will give it a dominant position in the North American market for frozen pizza, while giving Kraft the cash it needs to pursue its hostile bid for UK confectioner Cadbury.

The pizza acquisition fits with Nestle's stated strategy of targeting smaller acquisitions while returning cash to shareholders. The Swiss company said on Jan. 4 it would extend its share buyback programme following the sale of its remaining 52 percent stake in eyecare group Alcon to Novartis for $28.1 billion.

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