VEVEY, SWITZERLAND — Nestle, the world's biggest food and drink company, will buy the medical nutrition unit of pharmaceutical company Novartis for $2.5 billion, the companies said Thursday.
Nestle will acquire such brands as Boost and Resource nutritional supplements, and Optifast dieting products.
The deal still needs regulatory approval but is expected to be completed during the second half of 2007, Nestle said.
"I am very pleased that this acquisition allows us to become a very strong player in the strategic core category of nutrition," Chairman and Chief Executive Peter Brabeck-Letmathe said. "This is a very important step for the Nestle Group in its strategic transformation process to a nutrition, health and wellness company as it strengthens the core of our globally managed Nestle Nutrition business."
Nestle's U.S.-traded shares rose $1.70 to close at $90.70. The company's U.S. headquarters is in Glendale.
Nestle said the 2,000 Novartis employees currently working at the medical nutrition unit in Gland, Switzerland, would join the company, increasing its research and development capacity.
With expected sales of about $950 million this year, Novartis Medical Nutrition is the second-largest in its field.