Nestlé sells ice cream business for 4 billion dollars | Progresiv

Nestlé has reached an agreement to sell its US ice cream business to its Froneri joint venture in a deal worth 4 billion dollars.

Froneri was created in 2016 when Nestlé merged its European ice cream business in 20 countries with R&R, a unit of private equity firm PAI Partners. The group is now one of the world’s largest and fastest-growing ice cream companies with sales of 3 billion dollars last year.

The new deal means that Froneri, which already has operations in Europe, Latin America, Africa and Asia-Pacific, will now have a strong presence in the US, the biggest ice cream market in the world.

Nestlé’s US ice cream business generated sales of 1.8 billion dollars in 2018 from leading brands such as Häagen-Dazs, Drumstick and Outshine.

The move marks the latest divestment undertaken by Nestlé’s Chief Executive Mark Schneider as he seeks to overhaul the Swiss food giant’s product portfolio to cope with changes in consumer tastes.

He commented: “The creation of Froneri has been a phenomenal success. We are now making this business our global strategic partner in ice cream and are convinced that Froneri’s successful business model can be extended to the US market. With this transaction, we are taking a decisive step towards our goal of achieving global leadership in ice cream.”

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Froneri’s CEO Ibrahim Najafi added: “This is another milestone acquisition for Froneri as we drive towards becoming the world’s best ice cream company. We’re delighted to be bringing such well-loved US brands into the Froneri family.

“The acquisition is testament to the strength and longevity of our relationship with Nestlé. This partnership and the continued support of PAI Partners will be essential to ensuring we continue to delight consumers with innovative, high quality products in all markets.”

The deal is expected to close in the first quarter of 2020 following regulatory approvals.

Nestlé will continue to manage its remaining ice cream businesses in Canada, Latin America and Asia. (www.kamcity.com)