Swiss multinational food and beverage conglomerate Nestlé announced this week it will be off-loading its United States-based ice cream business to joint venture company Froeri for US$4 billion.
Former from an agreement between Nestlé and PAI Partners in 2016, Froneri is among the world’s largest ice cream companies with operations in Europe, Latin America, Africa, and Asia-Pacific. According to a release from Nestlé, Froneri has achieved “rapid sales and profit growth, steadily gaining market share and reaching a turnover of around 2.9 billion Swiss Francs in 2018.
“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 US brands into the Froneri family,” Ibrahim Najafi, CEO of Froneri, stated
“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,” he added.
So far Froneri has been able to increase its global footprint with the acquisition of Tip Top in New Zealand and Nestlé’s ice cream business in Israel.
As such, Nestlé is hoping that Froneri’s knowledge of the ice cream market, agile business model, and entrepreneurial management style will be instrumental in increasing its market share and brand presence in the United States. Equally, Froneri will be able to maximise on Nestlé USA’s capabilities in manufacturing, marketing, and sales and distribution.
“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,” Nestlé CEO Mark Schneider noted while calling the transaction with the joint venture a success.
In 2018, Nestlé USA reported sales of US$1.8 billion. In fact, with brands such as Haagen Dazs, Drumstick and Outshine, the Swiss company says it has made some inroads into the US ice cream market, especially in the premium segment, with what it calls its “high-calibre management team”
According to Frederic Stevenin of PAI Partners, ” We are excited to bring Nestlé 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 transfer of business is expected to finalised in the first quarter of 2020, after receiving regulatory approvals. In the meantime, Nestlé will continue to manage its ice cream operations in Canada, Latin America, and Asia.