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Nestlé cleared to take over US ice cream giant

Nestlé manufactures brands including Extrême in Switzerland

(Keystone Archive)

United States regulators have approved Nestlé's $2.5 billion (SFr3.3 billion) takeover of Dreyer's Grand Ice Cream, clearing it to become the biggest producer in the world's largest ice-cream market.

Under terms set by the US Federal Trade Commission, Swiss-based Nestlé will need to dispose of several smaller brands.

The takeover will leave Nestlé equal first in the $30 billion global ice-cream market, alongside Anglo-Dutch group Unilever.

Analysts are now bracing for a worldwide marketing battle between the two ice-cream giants, similar to the long-standing war between Pepsi and Coca-Cola.

Peter Brabeck, Nestlé's chief executive, said the deal marked the end of his company's hunger for new ice cream purchases.

"The transaction concludes the acquisition phase in the ice cream sector," Brabeck said in a statement on Thursday.

Shares down

Investors reacted cautiously to the deal, which has been under regulatory consideration for more than a year, amid concerns that the price may be too high.

Swiss-listed shares in Nestlé fell 0.7 per cent to SFr280 during early morning trading.

Analysts says this is set to be Nestlé's last big acquisition in its traditional areas of operation, where its size is increasingly bringing it into conflict with regulators concerned about the company's market dominance.

swissinfo, with agencies

nestlé summary

The global ice cream market is worth $30 billion a year.
US consumers spend $600 million a year on the most expensive ice cream brands.
Nestlé markets Haagen Dazs, while Dreyer's brands include Dreamery, Godiva and Starbucks.
Under the merger deal, Nestlé will boost its stake in Dreyer's to 67 per cent.

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