Nestlé has agreed to sell its US ice cream business to Froneri, its ice cream manufacturing joint venture with PAI Partners, for $4 billion, as per the latest food acquisition news.
The ice cream business being divested by Nestlé in the US manufactures ice cream brands such as Häagen-Dazs, Outshine, and Drumstick. The Swiss food and drink processing conglomerate had a turnover of $1.8 billion in 2018 from its US ice cream business.
Froneri was created in 2016 with PAI Partners through the merger of the former’s European ice cream business in 20 countries.
In 2016, Nestlé and PAI Partners merged Nestlé’s European ice cream business in 20 countries and the latter’s UK-based R&R Ice Cream to establish Froneri.
The ice cream joint venture had a turnover of nearly CHF 2.9 billion ($2.95 billion) in 2018.
According to Nestlé, the transaction will help Froneri gain a strong footprint in the US, which is considered to be the world’s largest ice cream market. The ice cream manufacturer already has operations in Europe, Africa, Latin America, and Asia-Pacific.
The recent acquisitions of TipTop in New Zealand and Nestlé’s ice cream business in Israel have also increased Froneri’s growing global footprint.
Mark Schneider – Nestlé CEO 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 U.S. market. With this transaction, we are taking a decisive step towards our goal of achieving global leadership in ice cream.”
Nestlé expects the deal to be wrapped up in Q1 2020 subject to customary regulatory approvals. The Swiss food and drink processing company will continue to operate its remaining ice cream businesses across Canada, Latin America and Asia as part of its existing market structure.
Ibrahim Najafi – Froneri CEO said: “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 U.S. 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.”
In July 2019, Froneri acquired Noga Ice Creams from Israeli food manufacturer and distributor Osem Group, which is also owned by Nestlé. Prior to that, Froneri acquired New Zealand ice cream brand Tip Top ice cream business from Fonterra for $250m.