Nestle has agreed a deal to sell its Gerber Life Insurance unit to insurer Western & Southern Financial for $1.55bn (£1.2bn).
The food giant, which has seen sales slide as consumers shift towards healthier foods, had been looking at offloading underperforming brands in its portfolio, and plans to buy and launch new products to address the changing market.
"This move is part of the ongoing evolution of our portfolio," Nestle chief executive Mark Schneider said in a statement.
"It will allow us to invest further in our core food and beverage business and in consumer healthcare."
The Swiss company has been under pressure from major hedge fund Third Point, which earlier this year demanded the board sell off more of the business in an attempt to revitalise the world's biggest food group.
In February, Nestle confirmed it was exploring sale options for its Gerber Life unit.
The deal means US-based Western & Southern can sell insurance under the Gerber Life brand.