Food Union has agreed to sell its ice cream business. The new owner will be the international ice cream producer Froneri, which is owned by Nestlé and PAI Partners. The value of the transaction is not being disclosed and still needs to be approved by the Competition Council.
The proposed transaction will include only the ice cream business in Latvia which, after being separated from the dairy products business, will be established as a separate legal entity. The transaction is expected to be completed in the coming months.
Food Union’s ice cream business in Europe holds strong market positions in each of the markets where it operates, offering local brands beloved by consumers. The dairy products business, based on the historic dairy producers JSC Rīgas Piena kombināts and JSC Valmieras piens, is not part of this transaction and its ownership will not change. In the coming months, after consultations with employee representatives, a plan will be developed to separate the operations of the ice cream and dairy businesses in Latvia.
The management teams of both companies will be made up of existing Food Union Latvija employees.
“Food Union has built a portfolio of locally loved brands in which we plan to invest in order to continue developing this business’s significant potential. We look forward to welcoming the Food Union team into Froneri so that together we can strengthen our ambition to become the best ice cream company in the world,” emphasizes Froneri CEO Phil Griffin.
“Froneri is a global benchmark in ice cream, and we are delighted that our beloved Latvian brands – Pols, Tio, Ekselence, Karlsons and others – have found a perfect home with a true world-class leader. Under Froneri’s leadership, these brands will gain broader reach and benefit from the advantages of a global brand portfolio and available resources, while preserving the local character and quality that consumers love. We look forward to jointly building the next stage of development,” says Food Union CEO for Europe and Latvia Artūrs Čirjevskis.
For the dairy business, this separation will allow an even stronger focus on core dairy product categories with high added value and on such beloved brands as Kārums, Lakto, Limbažu piens, Valmiera, Dzintars, and others in the home markets of Latvia and the Baltics, as well as in export markets.
“In recent years, our well-considered commercial strategy focusing on high value-added dairy product categories has contributed to market share growth in the Baltic home markets and double-digit growth in export markets in Western Europe and the Middle East, mainly through cooperation with major retail chains. Demand for high-quality, fresh and healthier dairy products is growing, and the separated dairy processing companies with their historic dairy plants in Rīga and Valmiera will continue to deliver on this promise,” adds Artūrs Čirjevskis.
Froneri is an international company established in 2016 as a joint venture between Nestlé and PAI Partners. Froneri operates in more than 25 countries, with revenues exceeding 5 billion euros and more than 12,000 employees worldwide. Food Union Europe is a leading ice cream, dairy and frozen foods company operating mainly in the Nordic countries, the Baltics and Romania, and is owned by PAG Private Equity. Food Union employs more than 2,200 people and its annual turnover exceeds 300 million euros.
Originally published at https://inc-baltics.com/saldejuma-pols-un-citu-iecienito-saldejumu-zimolus-pardos-nestle/
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