PAI Partners is said to be considering the possibility of divesting its stake in Froneri, the ice-cream venture it shares with Nestlé.
The private-equity firm is reportedly in the ‘preliminary stages’ of evaluating choices for selling its stake in Froneri, as stated by sources familiar with the matter, as reported by Bloomberg.
Those same sources, who chose to remain anonymous, have suggested that PAI Partners might contemplate divesting its share in the latter part of the year. Simultaneously, there is speculation about initiating an initial public offering for the stake. Additionally, these insiders have conveyed that Nestlé is expected to uphold its interest in Froneri.
The venture is evenly divided in a 50-50 split, and sources from the news agency estimate a $10 billion valuation for PAI Partners’ share.
When reached for comment, both PAI Partners and Nestlé opted not to provide any statements.
Froneri’s Global Portfolio Expansion with PAI Partners
Established in 2016, UK-based Froneri was formed through the amalgamation of Nestlé’s European ice-cream operations with R&R Ice Cream, another UK business owned by PAI Partners.
The Froneri transaction brought together the ice cream operations of Nestlé and R&R in regions spanning Europe, the Middle East, Argentina, Australia, Brazil, the Philippines, and South Africa. Although the United States and Israel were initially excluded in 2016, three years later, the latter was also incorporated into the Froneri portfolio.
In 2019, Nestlé proceeded to divest its ice-cream operations in the United States, selling them to Froneri.
The leading global food company maintained its presence in the ice-cream business across Canada, Latin America, and Asia.
Nestlé’s Ice Cream Sales in 2022
In the 2022 financial year, Nestlé records its ice-cream sales within the ice cream and milk products segment, contributing to a total segment sales figure of SFr11.3 billion ($13.2 billion). This segment constitutes 12% of the overall group sales.
According to the company’s annual report for that year, ice cream generated SFr930 million, marking an 8.2% increase from the previous year.
In October, when Nestlé released its third-quarter and year-to-date results, the company disclosed sales within the ice cream and milk products segment amounting to SFr8.1 billion. This represented a slight decrease from the SFr8.3 billion reported in the corresponding period.
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