April 28, 2016

As shifting markets continue to challenge industry giants, Nestlé and UK-based R&R Ice Cream have agreed to form the 50/50 joint venture, Froneri. The financial terms of the deal, which has been in negotiations since October 2015, have not been released, however with expected sales of US$2.8 billion and 15,000 employees the venture will likely be the third largest of its kind in the world.

The resulting entity will be headquartered in the UK and will be active in Europe, the Middle East (excluding Israel), Argentina, Australia, Brazil, the Philippines, and South Africa. Within these target markets, Froneri will unite Nestlé’s global brands with R&R’s manufacturing capacity and licensing agreements, combining both company’s ice cream businesses as well as Nestlé’s European frozen food business and its chilled dairy business in the Philippines, however, it will not include pizza and retail frozen food in Italy.

“This is an exciting growth opportunity in a dynamic category,” said Paul Bulcke, Nestlé CEO in a company statement. “Froneri will capitalise [sic] 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.”

Following the integration, Fromeri will be amenable to the possibility of mergers and acquisitions, and eventually plans to list on the London Stock Exchange, Reuters’ Business Insider reports.

R&R CEO, Ibrahim Niajafi will serve as Froneri’s CEO, while Luis Cantarell, Nestlé executive vice president Europe, Middle East, and North Africa will lead Fonteri’s six person board which will consist of three senior Nestlé executives and three member appointed by PAI Partners.

The deal is subject to securing regulatory approval and to employee consultations, however, it is expected to close by the end of 2016.