The world's biggest food group Nestle is buying Kraft Foods' North American frozen pizza business for $3.7 billion and ruled out an offer for Cadbury , it said on Tuesday.

Cash-rich Nestle, which this week sold a further 52 percent stake in eye care group Alcon to Novartis for $28.1 billion, said the United States was the largest pizza market in the world with sales of about $37 billion.

In a separate statement, the maker of Nescafe coffee, KitKat chocolate bars and Maggi soup also ruled out making or participating in any formal bid for Britain's Cadbury.

The Kraft pizza business includes brands like DiGiorno, Tombstone, California Pizza Kitchen, Jack's and Delissio. Nestle said synergies were estimated at 7 percent of sales and would be fully realized within five years.

(Reporting by Sam Cage; Editing by Mike Nesbit)