Nestle no longer screams for ice cream.
The world’s leading foodmaker has agreed to sell its US ice-cream business to Froneri, a joint venture it created in 2016 with private-equity firm PAI Partners.
Nestle will receive $4 billion for contributing the Häagen-Dazs, Dreyer’s and Drumstick brands to Froneri, a joint venture that mixed its European ice cream business with PAI-owned R&R Ice Cream.
Nestle Chief Executive Mark Schneider put a cherry on top of Froneri, calling it “a phenomenal success,” while observers saw the spin-off as another step by the Swiss company to hive off slower growing businesses.
Earlier this year, Nestle sold its skin-health operation for $10 billion and a life-insurance business for $1.5 billion.
It also has faced a rocky road in the US ice-cream market — the world’s largest — as new players like Halo Top serve up healthier alternatives.
Global leader Unilever, meanwhile, has stayed fresh by introducing a rash of high-protein, probiotic ice-cream brands with exotic names like Culture Republick and Turmeric Chai & Cinnamon.
The competition has reduced Nestle’s domestic ice-cream share this decade from more than 19 percent to 15 percent, while Unilever is up to 21 percent from 18 percent.
With sales of $1.8 billion last year, Nestle’s US ice-cream business will add heft to Froneri’s $2.9 billion, making “it more likely for the merged brands to compete against Unilever’s global scale,” said Bloomberg Intelligence analyst Duncan Fox.
The deal still leaves Nestle with ice-cream businesses in Asia, Canada and Latin America, but some observers wondered for how long given Schneider’s preference for products such as bottled water, coffee and pet food.
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December 12, 2019 at 08:14AM
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Nestle agrees to sell ice-cream business - New York Post
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