Nestle, the world's largest food and beverage company, is weighing whether to sell the U.S. division that makes such famous candy bars as Butterfinger and Baby Ruth.
Nestle said it's exploring "strategic options" and plans to have a deal done by the end of 2017, but it made it clear that any deal won't include Toll House baking products.
The U.S. confectionary business had sales of close to $929 million, according to the Swiss company, and; the U.S. is Nestle's biggest market with $27.3 billion in sales overall. Besides its famous candy bars, Nestle also makes candy like Skinny Cow, Raisinets, Laffy Taffy and Nerds.
"Nestle's chocolate business in North America has been a distant fourth in terms of market share when company typically aims to be No. 1 or 2, so overall the move toward a disposal is not a surprise," Jon Cox, head of European consumer equities at Kepler Cheuvreux said.
But candy is just one part of a basket of Nestle brands including Nestle Pure Life, Purina, Coffee-Mate, Gerber and Stouffer’s that will ensure the company continues to have a huge U.S. presence. About 97% of American households have Nestle products in them.
"Nestle will continue to invest and grow in the U.S., where it has leadership positions across a large number of categories such as petcare, bottled water, frozen meals, infant food and ice cream. Nestlé will continue to innovate across these categories to meet rapidly-changing consumer demand," the company said.
The company, which was founded in 1866, is currently in 191 countries around the world. according to its Web site. In the U.S., it employees more than 51,000 people in 47 states.
Nestle stock closed at 81 Swiss francs, up 0.43%.
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