The sales of the Isostar sports drink and the Ovaltine malt drink by Swiss pharmaceuticals group Novartis are expected to be completed soon, with a group of trade buyers lined up to take over the Ovaltine brand next week, according to press reports.
The deal will be the first in a series of spinoffs by Novartis worth about SF1 billion (€0.68bn), reported Canada's Financial Post this week.
The company put a number of its nutrition brands up for sale in February in a bid to streamline its focus on healthcare and particularly pharmaceuticals.
Sources told the paper that Credit Suisse First Boston, the investment bank advising Novartis, is holding three different auctions - one for Isostar, another for Ovaltine and a third for the health food and slimming brands.
The sale of Ovaltine is in its final stages, according to one source, and the vitamin-fortified malt drink is set to go to a consortium of trade buyers in a deal due to be finalised next week. Rights to the brand are to be divided by the consortium in different parts of the world.
Bankers said the brand could be worth more than SF250 million, according to the Financial Post.
Nestle is thought to be close to reaching an agreement to buy the health food brands, with a possible deal this month said the report.
A spokesman for Novartis said the sale of the brands was "on track" but declined to comment further. Novartis's health and functional food unit had sales of SF850 million (€579m) in 2001, and industry sources said the company could expect to raise about 1.2 times the value of its sales.
The sale of health and functional foods reflects an industry wide trend to "deconsolidate", but it will take time before Novartis can divest marginal businesses such as Gerber baby food and animal health, to become a pure pharma company.