Nestle S.A., a Swiss multinational food and drink processing conglomerate, had sold off its US-based ice cream business worth US$ 4 billion to Froner. Under this deal, the company transfers the ownership of Dreyer’s, Haagen-Dazs, and Drumstick brands to Froneri. Hagen-Dazs was owned by Nestle, which help the company to generate around US$ 1.8 billion in 2018.
Froneri is a joint venture company which was incorporated by Nestle with private-equity firm PAI partners in 2016. This entity incorporate Nestlé’s European ice-cream business and PAI-owned R&R in around 20 countries to establish one of the leading ice-cream companies across the globe. This deal is expected to close in the first quarter of 2020 due to some pending documents related to customary regulatory approvals. Nestle S.A. is the maker of KitKat chocolates and Nescafe coffee. In addition, the company will continue to operate its rest of ice-cream business in Latin America, Canada, and Asia as a part of its market structure. Apart from their Dreyer’s, Haagen-Dazs, and Drumstick ice-cream brands in 2019, the company has also sold off its skin-health operation worth US$ 10 billion and a life-insurance business worth US$ 1.5. Because of the deal, Froneri would generate sales of around US$ 5.3 billion a year with an increment of around US$ 3.2 billion from the previous year.
According to Mark Schneider, CEO of Nestle, the incorporation of Froneri, the third largest globally and first private-label producer, has been an enormous success. They are using the company to gain market share through a global strategic partner in the ice-cream business. This move will also help the company to extend its reach to the US market. The Froneri deal emphasizes the organizational changes which are going on in Nestle regarding the transformation of the product as well as the business portfolio. This will benefit the upcoming years as the company will focus on adding value to the primary business. In the meanwhile, the other subsidiary company will focus on the different business expansions