SWITZERLAND: Nestle confirms in talks to merge international ice cream operations with R&R | Progresiv
Nestle is in "advanced discussions" to merge its international ice cream business with R&R Ice Cream, in its latest effort to refocus on other, higher-performing brands. 
The world's largest packaged food company announced the talks after Reuters reported that R&R, maker of Cadbury Flake Cones, Rowntree's Fruit Pastille lollies and Kelly's Cornish ice cream, was in talks with Nestle to form a 50/50 joint venture in a 3 billion euros deal.
Nestle said it will contribute its ice cream businesses in Europe, Egypt, the Philippines, Brazil and Argentina, as well as its European frozen food businesses, excluding pizza but including products like frozen cake brand Erlenbacher.
All of UK-based R&R, owned by French private equity firm PAI, will go into the joint venture that will be equally owned by both parties.
Besides being far off Nestle's goal of becoming a "nutrition, health and wellness" company, its ice cream business is a distant No. 2 to world leader Unilever and always had weaker returns than other businesses, he said.
Mass-market ice cream is under pressure as consumer tastes shift toward healthy, fresh food or premium brands, opening up the market to smaller players.
Nestle's share of the global market, worth 67 billion dollars, is 10.8 percent, less than half of Unilever's and down from 12.8 percent in 2010, according to market research firm Euromonitor International. R&R has a 0.8 percent share.
Nestle oversees a sprawling portfolio including Gerber baby food, Nescafe coffee, KitKat bars and Purina pet food. That diversification has helped it weather the global economic downturn better than some other companies.
Still, like Unilever and Procter & Gamble, Nestle has been reviewing its portfolio, getting rid of underperforming brands. Over the past two years it has parted with most of its Jenny Craig diet food business, Power Bar snacks, Juicy Juice drink in the U.S., its frozen food business in Spain and its ice cream business in South Africa. (www.reuters.com)
