R&R in talks to form £2bn ice cream giant

​Yorkshire ice cream manufacturer R&R Ice cream is in advanced ​talks to create an ice cream giant with Nestle, the world’s biggest packaged food firm​.
Ibrahim NajafiIbrahim Najafi
Ibrahim Najafi

​The new £2bn joint venture would create a major player in the European ice cream market and R&R said it will provide long term stability for employees at R&R’s Northallerton headquarters.

R&R’s co-founder James Lambert told The Yorkshire Post: “It’s a great thing. It’s just shows the strategy that R&R has continued to follow over 25 years has led to the formation of probably the strongest ice cream business in the world from its roots in 1985 in Yorkshire.

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“It will produce a very long-term stable and productive business for employees, customers, shareholders and suppliers. It is absolutely the right thing.”

Mr Lambert said R&R will become the global footprint for the take-home ice cream business. ​

R&R, which makes Cadbury Flake Cones, Rowntree’s Fruit Pastille lollies and Kelly’s Cornish ice cream, will form a 50/50 joint venture with Nestle.

Nestle said it will contribute its ice cream businesses in Europe, Egypt, the Philippines, Brazil and Argentina, as well as its European frozen food businesses, which include frozen cake brand Erlenbacher.

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All of R&R, owned by French private equity firm PAI, will go into the joint venture, which will be equally owned by both parties.

Nestle’s ice cream business includes its own brand Nestle and Movenpick. Its ice cream operations in the US will be excluded from the deal.

R&R said the new partnership will capitalise on the complementary strengths and innovation expertise of the two companies. It said the deal will combine Nestle’s strong and successful brands and experience in out-of-home distribution with R&R’s competitive manufacturing model and significant presence in retail.

It is understood that PAI plans to exit in a few years’ time and Nestle will then list the business.

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PAI bought R&R, Europe’s largest private-label ice cream maker, in 2013 from Oaktree Capital Management for around £627m.

R&R’s CEO Ibrahim Najafi said: “We are excited about combining the respective talents of R&R and Nestle’s people to drive further growth in this category.

“The vision of the proposed joint venture is to grow a unique consumer and customer focused ice cream business serving all channels, delivering innovative, high quality ice cream through investment in people, process and products.

“The ambition of the proposed joint venture will be to sell more ice cream through meeting and exceeding customer and consumer needs.”

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The new joint venture will be led by Luis Cantarell, who is currently Nestle’s executive vice president Europe, Middle East and North Africa, as chairman and Mr Najafi as CEO. The supervisory board will be composed from both Nestle and PAI Partners, in equal proportions.

R&R and Nestle have worked together for the past 14 years, initially in the UK and Ireland and, more recently, in Australia and South Africa where R&R licences Nestle brands.

“We are excited about the prospect of this transaction although in the meantime, it is business as usual for R&R,” said Mr Najafi.

“We have made good progress with the integration of Peters and Nestle’s South African business.​”

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Nestle and rival Unilever control about a third of the £44bn global ice cream market. The sector is under pressure as consumers shift preferences towards healthy, fresh food or premium brands.

​R&R Ice Cream was founded in 1932 when ​an enterprising young Italian, Regina Roncadin, opened her first ice cream parlour in Germany​.

In 1970 her nephew established Roncadin’s ice cream parlours across Germany.

Over in Yorkshire, farmer Jonathan Ropner and businessman James Lambert bought a local ice cream manufacturer in 1985 and Richmond Ice Cream was born.

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In 2001 Richmond’s acquisition of Nestle’s UK ice cream business added brands such as Fab and Smarties.

In 2005 Roncadin was bought by investment fund Oaktree and a year later Oaktree bought Richmond Foods to merge with Roncadin. The result was R&R Ice Cream​.

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