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Nestlé to sell US ice cream unit for $4B

Nestlé SA will part with the portion of its business that sells brands including Häagen-Dazs and Drumstick in the U.S. for $4 billion, a deal that adds the unit to its joint venture with private equity firm PAI Partners, the company said Dec. 11.

The transaction with U.K.-based Froneri Ltd. is subject to regulatory approvals and is expected to close during the first quarter of 2020.

Froneri started in 2016 as a joint venture between Nestlé and Paris-based PAI. It already sells ice cream in multiple geographies, from Europe to Asia and the Pacific, and had annual sales of CHF2.9 billion in 2018.

In the same year, Nestlé's U.S. ice cream business posted sales of $1.8 billion.

Nestlé CEO and member of the executive board Mark Schneider called the joint venture "a phenomenal success" in a statement announcing the deal. "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," he said.

Nestlé will retain direct management of ice cream operations in Canada, Latin America and Asia.

The U.S. business is the latest addition to Froneri, which said it would acquire ice cream portfolios in Israel and New Zealand earlier in 2019. Nestlé, meanwhile, has renewed its focus in recent years on other areas of its business, including coffee and bottled water.