Nestlé swallows Häagen-Dazs for £441m

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Nestlé, the world's largest food maker, has stepped up its efforts to dominate the luxury ice cream market by gaining full control over the Häagen-Dazs brand in the US in a $641m (£441m) deal.

The move presents a significant challenge to Unilever, which at the moment is the market leader, with control of 17 per cent of the high-class ice cream market.

Nestlé, which currently accounts for 11 per cent of ice cream production worldwide, already owned 50 per cent of Häagen-Dazs. It has gained control of the remaining part of the business by buying out Ice Cream Partners from General Mills of the US.

Ice Cream Partners was set up in October when General Mills acquired Pillsbury from the drinks giant Diageo.

Pillsbury had co-owned Häagen-Dazs with Nestlé. Under the deal between Diageo and General Mills, Nestlé was given first refusal to buy out Pillsbury's stake in the gourmet ice cream brand. Nestlé indicated at the time that it would do this as part of its strategy to improve on its position as number three in the ice cream market.

The Swiss foods giant also recently purchased the ice cream business of Germany's Südzucker and wants to increase its stake in Dreyer, the company behind Godiva chocolates and ice cream.

Nestlé's moves will be closely watched by Unilever, which paid $326m last year for Ben & Jerry's and intends to build the Vermont-based business into a global brand. Nestlé's deal with General Mills lasts for 99 years and gives it control of a business that made $700m in sales last year.

General Mills will retain the right to sell Häagen-Dazs outside the US and Canada after it said when it bought Pillsbury that it would not sell the international rights to Häagen-Dazs. It plans to spend proceeds from the deal on reducing its debt.

James Dintaman, chief executive of Ice Cream Partners, will continue in his role at the California-based company.