Nestlé agrees to sell U.S. ice cream business to Froneri
The strategic move is designed to create a global leader in ice cream.
Nestlé, Vevey, Switzerland, said it has reached an agreement to sell its U.S. ice cream business to Froneri, an ice cream-focused joint venture Nestlé created in 2016 with PAI Partners, for a transaction value of USD $4 billion.
In 2016, Nestlé and PAI Partners merged Nestlé’s European ice cream business in 20 countries and PAI-owned R&R to create Froneri, one of the world’s largest ice cream companies. With “a portfolio of iconic brands, unparalleled ice cream knowledge and focus as well as an agile and entrepreneurial management style,” Froneri has been able to achieve rapid sales and profit growth, Nestlé said, steadily gaining market share.
Froneri, which already had operations in Europe, Latin America, Africa and Asia-Pacific, will now have a strong presence in the United States, the largest ice cream market in the world. The recent acquisitions of TipTop in New Zealand and Nestlé’s ice cream business in Israel have also increased Froneri’s growing global footprint.
Nestlé said its Nestlé USA’s ice cream business comes with a high-caliber management team, marketing, manufacturing and sales/distribution capabilities. In 2018, turnover was USD $1.8 billion. With brands such as Häagen-Dazs, Drumstick and Outshine, the business commands leadership in key ice cream categories, notably super-premium.
“The creation of Froneri has been a phenomenal success,” said Mark Schneider, Nestlé’s CEO. “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 U.S. market. With this transaction, we are taking a decisive step towards our goal of achieving global leadership in ice cream.”
Ibrahim Najafi, Froneri’s CEO, called it a significant milestone for Froneri.
“We’re delighted to be bringing such well-loved U.S. brands into the Froneri family,” he said. “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 transaction is expected to close in the first quarter of 2020, following the completion of customary regulatory approvals. Nestlé said it will continue to manage its remaining ice cream businesses in Canada, Latin America and Asia as part of its current market structure.
“We are excited to bring Nestlé’s stellar U.S. ice cream business to Froneri,” Frédéric Stévenin, partner at PAI Partners, said. “This is a great opportunity for further growth, building on the expertise of the world’s leading pure-play ice cream company.”
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