Nestlé and PAI Partners will have equal equity in the jv, which will have sales of around CHF2.7bn (£1.91bn) in over 20 countries employing about 15,000 people. Financial details have not been disclosed.
Froneri will be headquartered in the UK and will operate primarily in Europe, the Middle East (excluding Israel), Argentina, Australia, Brazil, the Philippines and South Africa.
The new company will combine Nestlé and R&R’s ice cream activities in the relevant countries and will include Nestlé’s European frozen food business (excluding pizza and retail frozen food in Italy), as well as its chilled dairy business in the Philippines.
The transaction is subject to employee consultations and the approval of regulatory authorities.
“This is an exciting growth opportunity in a dynamic category,” said Paul Bulcke, Nestlé ceo. “Froneri will capitalise on complementary strengths and innovation expertise, combining Nestlé’s strong and successful brands and experience in ‘out-of-home’ distribution with R&R’s competitive manufacturing model and significant presence in retail.”
Ibrahim Najafi, R&R Ice Cream ceo, who will be the new Froneri ceo, said: “I am thrilled about the potential of Froneri and the opportunity for R&R to combine with the biggest and best food business in the world. R&R has gone from strength to strength in the last few years and the blend of people from the two organisations will create a leading team, ideally suited to drive future growth.”
Frédéric Stévenin, partner at PAI Partners, added: “Froneri, through the combination of Nestlé’s and R&R’s expertise, and the backing of PAI Partners, is a unique and exciting opportunity for further strong growth. We look forward to further leveraging our industrial approach to ownership and strong consumer expertise to support R&R in this new venture.”
Luis Cantarell, Nestlé executive vice president Europe, Middle East and North Africa, will chair Froneri’s board of directors, which will comprise three senior Nestlé executives and three senior executives appointed by PAI Partners.
Clive Black, an analyst with Shore Capital, which used to cover Richmond Foods in Northallerton, the forerunner of R&R Ice Cream, remarked on the deal: “Boy, has this company been transformed from a domestic private label ice lolly producer into a European powerhouse for the sector: an amazing story with the new tie-up, underscoring its influence as a leading player now in the European market.”
Talks began in October 2015
FoodManufacture.co.uk first revealed that Nestlé and Europe’s largest own-label ice cream manufacturer R&R were in jv talks back in October 2015. It followed a long-standing relationship between the two companies. They have worked together for the past 14 years, first in the UK and Ireland, and more recently in Australia and South Africa.
In March 2015 R&R acquired Nestlé’s South African ice cream business.