Geneva ? Food and drinks giant Nestle announced Tuesday that it was buying U.S. food company Chef America, which makes Hot Pockets sandwiches, for $2.6 billion.

The news came as speculation builds that Nestle is a prospective buyer of Hershey Foods, the largest U.S. candy maker, in a deal that could be worth $10 billion.

“Chef America is an ideal and strategically important complement to our own frozen food activities in the United States,” said chief executive Peter Brabeck.

The Denver-based Chef America, which is privately held, expects sales of $720 million in 2002 an increase of more than 15 percent on last year.

Nestle said the deal required regulatory approval but it hoped to complete the purchase within 60 days.

The purchase of Chef America is the fourth biggest takeover within a year for Nestle and is expected to push the company’s net debt over $13.6 billion.

Nestle shares on the Zurich exchange gained 6 percent to $220.51.