In the past few years, Nestlé has been reevaluating its divisions and brands in an effort to optimize its operations and profits. Last year the company sold its confectionary business to Ferrero, and earlier this year it sold off its lunchmeat business to Herta. Now, Nestlé has announced its recent agreement to sell its U.S. ice cream business to Froneri for $4 billion USD. Froneri is an ice cream-focused joint venture Nestlé created with PAI Partners in 2016.
"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,” commented Mark Schneider, Nestlé CEO. “With this transaction, we are taking a decisive step toward our goal of achieving global leadership in ice cream."
In 2016, Nestlé and PAI Partners merged Nestlé’s European ice cream business in 20 different countries and PAI Partners-owned R&R to create one of the world’s largest ice cream companies, Froneri. Thanks to unparalleled ice cream know-how, focus, agile and entrepreneurial management style, and iconic brands, Froneri has achieved rapid sales and profit growth, gaining considerable market share and reaching a turnover of around $2.95 billion USD.
The sale is expected to close in the first quarter of 2020 following the completion of regulatory approvals. After the deal, Nestlé will continue to manage its remaining ice cream businesses in Canada, Asia, and Latin America as part of its current marketplace structure.
"We are excited to bring Nestlé’s stellar U.S. 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,” Frédéric Stévenin, Partner at PAI Partners, said in a press release.
With the sale, Froneri will gain Nestlé USA's high-caliber management team, marketing, manufacturing, and sales and distribution capabilities. Turnover was $1.8 billion in 2018. With brands like Drumstick, Häagen-Dazs, and Outshine, the business commands leadership in key ice cream categories, including super premium.
With operations already in place in Europe, Asia-Pacific, Africa, and Latin America, Froneri will be strengthening its presence in the U.S., the largest ice cream market in the world, the press release states. Its recent acquisitions of TipTop in New Zealand and Nestlé’s ice cream business in Israel has positioned Froneri to significantly grow its international footprint.
"This is another milestone acquisition for Froneri as we drive toward becoming the world’s best ice cream company. We're delighted to be bringing such well-loved U.S. brands into the Froneri family,” said Ibrahim Najafi, Froneri CEO. “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."
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