Financial conditions of the agreement were not opened
The Nestle company concluded the agreement with the British company R%26R Ice Cream for the purpose of creation of joint venture which will sell ice cream and the frozen products more than in 20 countries. This agreement is one of the last attempts of the company to adapt to the changing and more competitive market.
The agreement which declared on Wednesday, finishes months of negotiations between Nestle and the owner of R%26R, PAI Partners about whom for the first time reported Reuters in October.
The joint venture will follow the revision of a portfolio aimed at improvement of work of Nestle which was weakened by slowing-down emerging markets, change of consumer tastes in favor of fresher products and competition strengthening.
The joint venture with equal shares 50/50 which will be called Froneri, will unite Nestle and the R%26R ice cream companies in Europe, the Middle East, Argentina, Australia, Brazil, Philippines and South Africa, connecting strong brands of Nestle and presence at mini-markets and ice cream stands to the capacity of R%26R and access to traditional retailers.
Froneri JV completely corresponds to Nestle strategy on improvement of management by the product range, analysts of Vontobel which predicted reported that the agreement will increase the size of profit of Nestle in 2017 on 20-25 basic points.
Nestle got rid of more than 25 divisions for the last four years. Competitors of Unilever and Procter %26 Gamble also sold unsuccessful assets as delay of global growth drew more attention to profit.
Nestle which seeks to become the company which was more concentrated on useful products, will keep the stronger companies of ice cream in Asia and America and a position of the second-large company of ice cream in the world after Unilever.
Financial conditions of the agreement were not opened, but the enterprise will take the third place with annual sales in 2,7 billion Swiss francs ($2,8 billion) and 15 000 employees.
Froneri will be based in the United Kingdom where it plans to be registered eventually at the London stock exchange.
Ice cream of the mass market got under pressure as consumers look for more useful and qualitative product, opening the market to smaller players.
Except the companies of the Nestle and R%26R ice cream, making Cadbury Flake Cones and other frozen desserts, Froneri will include the European business of the frozen products of Nestle, excepting pizza and the frozen products at retail in Italy, and business of the cooled dairy products on Philippines.
Partners refused to give comments on possible staff reductions, having reported that at the initial stage the attention will be concentrated on growth of sales, filling of gaps in the corresponding networks of distribution.
After integration the enterprise also will be open for merges and acquisitions.
Nestle have other joint ventures, one - with the American producer of dry breakfasts of General Mills, another - with the French dairy firm Lactalis.
The agreement as expect, will come to the end by the end of the year, having undergone testing of regulators and consultation with employees.
Credit Suisse while Rothschild advised PAI was the consultant of Nestle.