Nestle Increases Its Share of Global Ice Cream

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Jun 17, 2002
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Bloomberg reports that Nestle SA has agreed to take control of Dreyer’s Grand Ice Cream Inc. by combining its U.S. ice cream business with the U.S. market leader in a transaction worth about $2.4 billion.

Nestle will raise its stake in Dreyer’s to 67 percent from 23 percent by merging its Haagen-Dazs and other brands in the U.S. with Dreyer’s business in exchange for 55 million shares, according to Nestle Spokesman Francois-Xavier Perroud.

The maker of Edy’s ice cream is Nestle’s third addition in the fast-growing frozen treats business in six months. Gaining control of Dreyer’s will give the Swiss company about 17 percent of the $25 billion global ice cream market, roughly equal to global leader Unilever, the company says. Dreyer’s Chairman T. Gary Rogers will lead the combined businesses.

Moderator Comment: What impact will the Nestle/Dreyer’s
deal have on the ice cream and frozen novelty market?

Clearly, this deal signals the intention of putting the
combined Nestle/Dreyer’s entity into a position to go after the market share
held by Good Humor/Breyers. It could also signal problems ahead for local and
regional ice cream suppliers as a stronger Nestle/Dreyer’s commands more freezer
case space. [George
Anderson – Moderator
]

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