Nestlé sweetens ice-cream position

Nestlé sweetened its position as one of the world's largest ice-cream makers on Thursday by agreeing to pay General Mills $641m for the 50 per cent stake of Ice Cream Partners USA it did not already own. The Swiss-based Nestlé competes head-on with Unilever, the Anglo Dutch company that last year strengthened its position in the gourmet ice-cream market by buying Ben & Jerry's Homemade Inc. Ice Cream Partners USA was created in 1999 by the then-independent Pillsbury and Nestlé to sell ice-cream products in the US, and combines Pillsbury's Haagen-Dazs frozen ice-cream with Nestlé's novelty ice-cream business. The venture was designed to reduce costs for both companies and to expand the market for Haagen-Dazs in the US. Nestlé said in October it was keen to buy the other 50 per cent of the venture after regulators approved the sale of Pillsbury, then owned by Diageo of the UK, to General Mills. General Mills, the largest US cereals maker, said Nestlé would have a 99 year paid in full license for the Haagen-Dazs ice cream brands in the US. General Mills said Nestlé would also buy out an existing licensing agreement, under which Nestlé makes and distributes Haagen-Dazs products in Canada. General Mills will continue to own and operate the Haagen-Dazs business internationally. General Mills will use the money to reduce debt as previously announced. By midday in New York on Thursday, General Mills shares were 3 cents higher at $52.40.