Novartis is delaying the planned sale of its health food and slimming and sports nutrition businesses due to a lack of attractive offers in the current weak economy, it said today.
The businesses, which include the Cereal and Gerble slimming brands and the Isostar sports drink, are instead to be reorganised into a stand-alone unit called 'Nutrition et Sante'.
The company said that corporate decision making has become more conservative and bids for the health food brands, which had sales of €280 million in 2001, have not been in line with their value. Rumours have suggested Nestle is interested in the business and the Swiss food group confirmed recently that it will focus on nutrition in the future.
In October Novartis sold its food and beverage business to Associated British Foods for €272.5 million, as part of the current strategy to focus further on healthcare and the core pharmaceuticals business.
Paul Choffat, CEO of the Consumer Health Division, said that the new Nutrition et Sante unit would ensure the business potential of the health and slimming brands and would allow it to continue to grow. However, sales at the unit have been consistently weak over the last year and the company failed to confirm how it will build on the value of the business.
Alain Chatillon, current head of the health and functional foods business in France, will be CEO of 'Nutrition et Sante', which will be headquartered in Revel, France.
He said: "As a stand-alone and focused company with well-established pan-European brands and good market rankings, we will strengthen our position among consumers and key trade partners."
Novartis is the world's third biggest pharmaceuticals company, with sales of SF32.0 billion in 2001.