Nestlé has agreed to buy Gerber, the American baby-food brand, from Novartis for $5.5 billion (£2.8 billion) in cash, finally cementing its position as a world leader in foods and other products for babies, infants and toddlers.

Buying Gerber, thought to have been on Nestlé's wish list for a decade, immediately catapults the Swiss sweets and drinks maker to the top of the US market, the world's biggest for baby foods.

With annual sales approaching £4.15 billion, it also gives Nestlé Nutrition sizeable scale in infant, healthcare and "performance" nutrition products, with a dedicated North American sales force.

Nestlé already is the world’s biggest maker of infant nutritional products, but has lacked a baby food brand in the all-important US market.

As well as marketing the Gerber baby-food brand in the US, the company sells other baby care products and offers "juvenile" life insurance.

Expected to be complete during the second half, the deal is Nestlé's third food acquisition, after it bought Jenny Craig and spent $2.5 billion on the Medical Nutrition division of Novartis.

"The acquisition of Gerber is the perfect complementary fit," Peter Brabeck-Letmathe, the chairman and chief executive of Nestlé, said.

"It not only gives Nestlé the leadership position in baby food, but it also constitutes a decisive step to establish Nestlé Nutrition as the undisputed global leader in the nutrition field, with annual sales of around SwFr10 billion, covering all important sectors: infant formula, baby food, medical nutrition, weight management and performance nutrition."

As well as being the US leader in baby foods, Gerber is a significant player in Mexico, Poland and Central America.

Founded in 1928 and owned by Novartis since 1994, Gerber operates in more than 50 countries, selling 300 food products for infants and toddlers.

Last year it generated unaudited operating profits of $307 million on sales of $1.6 billion.

Nestlé said that it expected the combined group to generate cost savings and improve operating margins.

For Novartis, selling Gerber completes its sell-off programme designed to refocus it on healthcare, in particular on pharmaceuticals.

Daniel Vasella, the chairman and chief executive of Novartis, said that more than half the non-core, non-healthcare businesses had been sold in the past ten years.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts