17 June 2008 – Nestle has placed a US$300 million ceiling on takeovers in the near term because of a lack of attractive targets, chairman Peter Brabeck has said.
The Nestle chief revealed the world’s biggest food company had set aside a maximum of US$200-300 million dollars per purchase.
The announcement comes after the firm said it would use a US$39 billion windfall from the sell-off of its contact lens division Alcon to repay debt.
Brabeck also said Nestle was unlikely to increase its sales prices in the near term as commodity costs have peaked already.
He was reported as saying: “"You are now seeing the (financial) impact of price increases which were done some months ago. I would expect this to flatten out over the next several months and not increase anymore as our costs have come down.
“The worst is probably past,” he added, speaking from the World Economic Forum in East Asia.
Brabeck also confirmed the company had no plans to sell its 29% share of L’Oreal.
At a separate event held yesterday at Nestle’s Swiss headquarters, the company confirmed it would continue to target long-term sales growth of between 5-6% a year as well s yearly improvements on its pre-tax profits.