Nestlé Weighs Reducing Exposure to Ice Cream, Revamps Board
(Bloomberg) — Nestlé SA is considering further reducing its footprint in the ice cream business, as new Chief Executive Officer Philipp Navratil reviews the company’s sprawling operations, people with knowledge of the matter said.
The Swiss food giant has been studying possibilities including cutting its stake in Froneri, an ice cream joint venture with private equity firm PAI Partners which includes brands like Häagen-Dazs and Mövenpick, according to the people. It could also consider selling some of its remaining fully-owned ice cream operations to the Froneri venture, one of the people said.
Deliberations are ongoing and there’s no certainty a deal will eventually materialize. PAI could opt to increase its stake in Froneri if Nestlé decides to cut its holding, or the Swiss group could sell part of its Froneri stake to another investor like the Abu Dhabi Investment Authority, according to some of the people.
Representatives for Nestlé and ADIA declined to comment, while a spokesperson for PAI didn’t respond to queries.
Nestlé had long been known as one of the world’s largest ice cream makers until Froneri took over most of the business. The Swiss food company still sells ice cream in some local markets that are not part of Froneri.
PAI raised billions last year to be able to hold on to Froneri for longer. ADIA came in as a new minority investor at the time, in a deal that valued the firm at about €15 billion ($17.7 billion) including debt.
Shares of Nestlé are close to their lowest level in eight years and before Wednesday had dropped about 40% from a peak in 2022. By contrast, main competitors Danone SA and Unilever Plc have gained more than 20% over the same time period.
Board Revamp
Nestlé is grappling with an infant formula contamination crisis, alongside Danone and Groupe Lactalis. It’s expected to report results later this week, and analysts have forecast lackluster earnings, though investors are likely to focus on its plans for the path ahead and details on divestments.
The food giant also announced a board shake-up on Wednesday evening ahead of the full-year results.
Nestle nominated Thomas Jordan, the former president of the Swiss National Bank, and Fatima Francisco, a top executive at Procter & Gamble, to its board of directors. Jordan and Francisco will stand for election at the company’s upcoming annual general meeting in April.
The Vevey-based company said in the statement that it wants to increase its board engagement after a review of the body’s structure and practices.
“With the changes announced today, we will further leverage the Board’s engagement in the company’s success, enrich oversight, and strengthen decision-making,” Pablo Isla, the chair of Nestle’s board who leads the revamp, said in the statement.
Isla took the helm at Nestle’s board last year after a governance crisis shook the foodmaker to its core. An undisclosed romantic relationship involving former CEO Laurent Freixe led to his departure. Long-standing chairman Paul Bulcke stepped down shortly after.
Thomas Jordan is one of the most high-profile figures in Swiss finance, and his presence on the board will bolster Nestle’s financial heft and adds Swiss institutional knowledge to the body. Jordan also sits on the board of Switzerland’s largest insurer Zurich Insurance.
The central banker oversaw the removal of a cap on the Swiss franc against the euro in 2015 and headed the country’s central bank during the collapse of Credit Suisse in 2023.
Francisco is adding expertise in core consumer-goods while strengthening gender diversity on Nestle’s board.
–With assistance from Swetha Gopinath and Alex Dooler.
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