Nestle SA and PAI Partners joined forces to dominate the ice cream business in an intense competition with market leader Unilever PLC.
Nestle agrees to sell its US ice-cream arm joint to private equity firm Froneri for $4 billion. Froneri was created after Nestle merged with PAI Partners, which handles the brand. It is an ice cream business that sells the product to 20 countries in Latin America and Asia.
The deal allows Froneri to sell Nestle ice cream brands to Europe, Latin America, Africa, and some countries in the Asia Pacific. Meanwhile, Nestle will continue its ice cream businesses in Canada and Asia as part of its market structure.
PAI Partners is one of the largest ice cream companies in the world, with sales of $2.91 billion last year. The joint venture with Nestle is expected to increase PAI Partners’ annual sales, adding $1.8 billion.
Nestle CEO Mark Schneider said, “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.”
Nestle said the deal will close in the first quarter of 2020, after the regulatory approvals.
Changing Ice Cream Appetite
Unilever owns the brands Magnum, Ben & Jerry’s, and Talenti, which are consumers’ favorites. The brand continues to create new, seasonal flavors to attract more consumers. It has launched a brand called Halo Top, which offers high-protein, low-calorie, and low-sugar ice creams. This has intensified Unilever’s sales, increasing sales by 20.9 percent.
In addition to Halo Top, Unilever also launched a healthier ice cream brand called Culture Republick, with low-calorie ice creams containing probiotics like turmeric chai, cinnamon, milk, and honey.