To aid Dreyer's bid, Nestl may end venture

Nestlé likely will abandon a Dreyer's Grand Ice Cream venture that regulators said would harm competition, according to a Houston Chronicle newspaper article.

Attempting to gain approval for its $2.8 billion acquisition of Dreyer's, Switzerland-based food maker Nestlé reportedly will end an arrangement Dreyer's has with Mars to make ice cream flavored with Snickers and M&Ms, to allay worries about the two candy producers' collaboration. After the United States Federal Trade Commission initially voted against its purchase of Oakland CA-based Dreyer's, Nestlé agreed to sell three Dreyer's brands to CoolBrands International.

The acquisition of Dreyer's, which has a delivery system that helped make it the leading US brand, would boost Nestlé's share of the US ice cream market from less than 10% to 18%. Nestlé, which produces Häagen-Dazs, is vying with Unilever — maker of Ben & Jerry's, Good Humor, and Breyers ice cream — for control of the $25 billion world ice cream market. Unilever maintains 19% of the US market.

Nestlé could take up to six months after it completes the Dreyer's transaction to end the venture with Mars. Seeking to protect its trade secrets, Mars is not against severing its ties to Dreyer's, the article said.

TAGS: Foodservice
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