Nestlé, the Swiss consumer foods company, is preparing to make a significant foods business acquisition, sources close to the company have said.

The foods company has just announced that it will sell FIS flavours, its food ingredients subsidiary, to Givaudan, the Swiss food ingredients producer and one of Nestlé's existing ingredients suppliers. Nestlé is receiving SFr750m (€510m) in a mixture of cash and just under 10% of Givaudan stock. The FIS business has operations in a wide range of locations from Switzerland and Singapore to the US.