Nestlé, the Swiss food giant and maker of Kit Kats and Nespresso coffee has confirmed that it is in “advanced discussions” to merge with R&R Ice Cream.

R&R, a private French equity firm, hopes to work with Nestlé to combine its manufacturing model with Nestlé’s distribution network. This merge aims to create a more intimidating rival to Unilever, who’s shares in the global ice cream market is 22.8%, more than double Nestlé’s 10.8%

Nestlé’s chief executive, Paul Bulcke, has said “We have a long-standing relationship with R&R. Combining the capabilities of our two companies in this way would offer an exciting opportunity for future growth in a dynamic category.” This growth refers to Nestlé’s hopes to contribute to ice cream businesses in Brazil, Egypt, Europe, Argentina and the Philippines.

According to Euromonitor food analyst, Lianne van den Bos, Nestlé’s expansion into the ice cream market will mean that “Nestlé will be further removed from its aim to be the world’s leading nutrition, health and wellness company… the company’s health and wellness vision is becoming blurred.”

Analysts have predicted that Nestlé will benefit from the merge with R&R.

 

Safiya Bashir 05/10/2015