Nestle to Sell Favorite Foods Unit to Morningstar Group

Nestle USA said Monday that it has signed a definitive agreement to sell its Favorite Foods unit in Fullerton to a food products company based in Dallas. Terms of the proposal were not released.

The sale won’t affect employment at Favorite Foods, which has about 100 employees in Fullerton. The company also operates a plant in Bakersfield. Favorite Foods, which produces yogurt products that are marketed under several brand names, reported $44 million in 1992 sales.

The Morningstar Group, which owns several companies that produce cottage cheese, sour cream and yogurt, hopes to complete its acquisition of Favorite Foods by March 31.

“Favorite Foods and Morningstar Group are basically in the same genre of business, which is private-label suppliers,” said Morningstar spokesman Tracy L. Noll. “We both have some branded products and are private-label suppliers. The difference is that they are yogurt specialists and we are not.”

Nestle agreed to sell the Fullerton company “as part of a long-term strategy of focusing on ice cream and related products,” a Nestle spokesman said Monday.