CEO of the Swiss food and beverage giant Nestle She said she would be open to making a “big deal” as she reasserts her growth strategy after cutting her stake in the French cosmetics business. L’Oreal.
Mark Schneider, CEO of the company responsible for home brands including Nescafe and Kit Kat, told CNBC that while it isn’t “compelled” to make any acquisitions, it is certainly considering all options as part of its overall growth strategy.
The CEO of Swiss food giant Nestlé, Ulf Marc Schneider, addresses the annual general meeting of shareholders on April 11, 2019 in Lausanne.
Fabrice Cofferini | AFP | Getty Images
“We would be open to making a big deal again,” Schneider told Juliana Tattlebaum on Thursday. “Do we feel compelled to do one? No. Are we open to that? Yes.”
Nestle reduced its stake in L’Oreal to 20.1% from 23.3% in December, and a resale of 8.9 billion euros ($10 billion) of shares amid scrutiny over its impact on the cosmetics brand.
Besides potential big deals, Schneider also said the company will consider smaller acquisitions with fewer regulatory challenges.
“It’s not that we prioritize one over the other,” he said. “It’s all really driven. Does it have a strategic meaning? Does it have a cultural meaning? Then we go and take a closer look.”
Schneider added that in the current market, where assets are fully valued, small and medium-sized deals are likely to provide better returns.
He continued, “Purchasing at the right price, for me, is the starting point for successful M&A activity.” “So it’s not a policy change, it’s just a reaffirmation of the fact that yes, we want to build our business and that includes acquisitions, just like internal growth.”
Nestlé released Full-year financial results ThursdayAnd recorded organic growth of 7.5%, exceeding expectations. Sales for the year grew 3.3% to 87.1 billion Swiss francs ($94.5 billion).
The company said it expects modest growth of around 5% in 2022 amid ongoing cost pressures.
Nestle shares fell 1.1 percent in early trading.