Nestle in talks with UK's Brakes Group to sell frozen food unit
Nestle in talks with UK's Brakes Group to sell frozen food unit

Nestle, one of the larhest manufacturers of chocolates and chocolates product in the world is  in exclusive talks to sell its frozen food unit Davigel to Brakes Group, owned by buyout fund Bain Capital, as part of a drive to trim its sprawling portfolio, reported Reuteurs.

Nestle, whose statement on Wednesday confirmed what a person familiar with the situation had previously told Reuters, missed a long-term sales target last year and has signalled the objective could be difficult to reach this year.

For Brakes, whose brands include Freshfayre and M&J Seafood, the deal would increase its presence in France and would allow it to enter Belgium and Spain.

The group will also give exclusive rights to distribute Nestle's branded ice cream to the "out-of-home" market, a category which includes restaurants, in France.

The chocolate manufacturer however did not give any financial details of the disposal and noted the deal was subject to consultation with works councils and the approval of the competition authorities.

The source also confirmed that the sale was expected to raise between 200 million euros ($213 million) and 300 million.

Credit Suisse is advising Nestle on the deal, several people familiar with the situation said. The Swiss bank declined to comment.

Davigel, which supplies frozen and chilled meals and ice cream to restaurants and hospitals, was part of the Buitoni frozen food business Nestle bought in 1989.

Nestle has in recent years sold the PowerBar and Musashi brands to US group Post Holdings, as well as its US frozen pasta business to Brynwood Partners and the bulk of its Jennie Craig business.

It also sold a 10 per cent stake in fragrance and flavour maker Givaudan in December 2013.

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