NESTLE BUYS DREYER'S

Stock Deal Worth $2.4 Billion Merges Top Ice Cream Brands

By Published on .

NEW YORK (AdAge.com) -- Nestle said today it is merging its U.S. ice cream business, including its Haagen-Dazs brand, into Dreyer's Grand Ice Cream in a stock deal valued at $2.4 billion.

Nestle said it will receive 55 million shares of Dreyer's, the Oakland, Calif.-based packaged ice cream player that is the best-selling brand in the U.S. It packages its ice cream under the Dreyer's name in the Western U.S. and as Edy's in the East. Dreyer's claims 19% of the market, ahead of Unilever Bestfoods' Breyer's, with 12%, and Ben & Jerry's, with 5%.

The combination will increase Nestle's current stake in Dreyer's from 23% to 67%.

Nestle said the combination would "produce significant operating efficiencies" that are expected to create $170 million in savings by 2005.

"Strategically it certainly makes sense to tie the businesses together, bringing in Dreyers DSD [direct store distribution system] and more than doubling U.S. ice cream sales," said

Related Stories:
ICE CREAM MARKETERS CHILLY ON AD SPENDING
$4.5 Billion Industry Spends Less Than $40 Million in Advertising
NESTLE SHIFTS HAAGEN-DAZS TO JWT
Move Follows Purchase of Ice Cream Brand
NESTLE BUYS STAKE IN HAAGEN-DAZS
Gets Licensing Rights in $641 Million Ice Cream Deal
Credit Suisse First Boston analyst Dave Nelson.

Nestle Ice Cream Co. was created as a joint venture between Nestle and Pillsbury in 1999 and is comprised of the Nestle USA novelty ice cream business and the Haagen-Dazs frozen dessert businesses.

Last December Nestle, based in Vevy, Swizterland, acquired the remaining 50% stake in the joint venture with Pillsbury and General Mills, which included Haagen-Dazs in North America. Nestle Ice Cream Co. brands include Haagen-Dazs, Drumstick, Nestla Crunch and Butterfinger.

Dreyer's lines also include Dreamery, Starbucks and Godiva.

In this article:
Most Popular