Poor annual outcomes in 2018 is prompting Fonterra to carry out a major asset review.
Fonterra Co-operative Group Limited has reportedly announced that it has agreed to offload Tip Top, its ice cream business in New Zealand, to Froneri, the ice cream manufacturer, in a deal worth NZD 380 million ($250.2 million). Fonterra was considering selling this unit as a part of plans to decrease its debt levels, cited reliable sources.
Reportedly, the deal is expected to be complete by the end of the May 2019. After completion of the deal, the Tip Top operations, including its Auckland-based factory at Mount Wellington, and its name will be maintained.
Ibrahim Najafi, CEO, Froneri, reportedly stated that the company has always held Tip Top in high esteem and the company has been awaiting to welcome the team into Froneri. The company’s vision is to create the best ice cream company in the world and key part of the strategy is to promote local market successes and launch them across other markets, he further added.
Kim Ballinger, Managing Director, Tip Top, reportedly stated that the company will be benefitted from the scale and expertise of Froneri as a part of Froneri family, while maintaining the commitment to local heritage and many loyal consumers in New Zealand and the wider APAC region. The company is excited about what the future of the selloff holds, she further added.
Fonterra has reported a net loss of NZD 196 million ($128.5 million), which is its first annual loss since its inception in the year 2001, for the financial year ending July 2018. The poor outcomes prompted the company to carry out a major asset review.
For the record, Tip Top is a New Zealand based ice-cream manufacturing company. The company was founded in Wellington in the year 1936. It sells a range of ice cream lollies, tubs and ice cream bars.
Froneri, headquartered in the U.K., is the third-largest ice cream manufacturer globally. It is a joint venture by R&R and Nestlé.