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$2.8 Billion Ice-Cream Merger Can Be Completed After Divestiture

By Published on .

NEW YORK (AdAge.com) -- The Federal Trade Commission yesterday said it has agreed to settle antitrust charges against Nestle S.A. and Dreyer's Grand Ice Cream, allowing the companies to complete a planned merger.

Superpremium brands
As part of the settlement, Dreyer's is

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expected to divest its superpremium brands Dreamery and Godiva as well as Whole Fruit sorbet to CoolBrands International within 10 days of being acquired by Nestle, and Nestle is expected to turn over its distribution assets to CoolBrands within the same period.

The FTC in March sought a preliminary injunction to block the $2.8 billion deal, asserting it would violate antritrust laws by eliminating competition and raising prices for superpremium ice cream. At the time, the companies scrambled to divest themselves of brands to satisfy the FTC.

$600 million spent
According to a release by the FTC, U.S. consumers spend roughly $600 million annually for superpremium ice cream and Nestle, Dreyer's and Unilever-owned Ben & Jerry's account for about 98% of those sales.

Nestle will continue to market superpremium ice cream under the Haagen-Dazs banner but the proposed FTC order also requires that Dreyer's make its license to manufacture, distribute and sell Starbucks superpremium ice cream nonexclusive and allow Mars and Ben & Jerry's to terminate their relationships with Dreyer's.

Representatives for Nestle and Dreyer's could not be reached at press time.

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