Nestlé has announced that it has reached an agreement to sell it’s the US ice cream business to Froneri, an ice cream-focused joint venture Nestlé created in 2016 with PAI Partners, for a transaction value of US$ 4 billion (approximately Rs 30, 000 crore). 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, steadily gaining market share and reaching a turnover of around CHF 2.9 billion (approximately Rs 20,000 crore) in 2018.
According to the press release, Froneri, which already had operations in Europe, Latin America, Africa, and Asia-Pacific will now have a strong presence in the US, 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.
In 2018, turnover was USD 1.8 billion (approximately Rs 12,000 crore). With brands like Häagen-Dazs, Drumstick, and Outshine, the business commands leadership in key ice cream categories, notably super-premium.
Commenting on the transaction, Mark Schneider, chief executive officer at Nestlé said, “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.”
Ibrahim Najafi, chief executive officer of Froneri said, “This is another milestone acquisition for Froneri as we drive towards becoming the world’s best ice cream company. The acquisition is a 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.”
Frédéric Stévenin, Partner at PAI Partners, said, “We are excited to bring Nestlé’s stellar US ice cream business to Froneri. This is a great opportunity for further growth, building on the expertise of the world’s leading pure-play ice cream company.”
The transaction is expected to close in the first quarter of 2020, following the completion of customary regulatory approvals. Nestlé will continue to manage its remaining ice cream businesses in Canada, Latin America, and Asia as part of its current market structure.