Disposals needed for Nestlé/Dreyer’s merger

USA – It looks likely that Nestle will have to dispose of some assets to gain regulatory approval for its proposed merger with ice cream company Dreyer’s, according to a submission to the US Securities and Exchange Commission (SEC).

The deal between the Swiss food group and Dreyer’s was announced in June last year and has been under investigation by the Federal Trade Commission (FTC) ever since. Dreyer’s submission to the SEC stated that talks with the FTC could lead to unspecified conditions being imposed on the deal that would probably include sales of certain assets. Dreyer’s and Nestle are extending the FTC’s anti-trust review period until 10 March.

If the merger goes ahead, Dreyer’s will become part of Nestle’s Nestle Ice Cream Company, making it one of the largest in the USA with a 20% market share. With brands like Nestle’s Haagen-Dazs and Dreyer’s Godiva and Dreamery, the new company would be on a par with rival Unilever, which also has roughly a fifth of the market share.

It is estimated that Nestle would have annual sales of €5.1 billion if the deal is completed – Dreyer’s Godiva and Dreamery brands account for €1.4 billion in annual sales alone.