Nestle in advanced talks to divest frozen food unit

Sources reveal Nestle has been engaged in advanced level discussions regarding the divestment of its frozen food unit Davigel to Brakes Group, owned by Bain Capital, a buyout fund.

As cited in Reuters, people familiar with the matter said that the two companies are in talks about the prospective sale, and the deal could be signed soon.

A second source was quoted as saying that the sale, that is expected to amount to between €200m and €300m ($211-317m), is being handled by Credit Suisse.

In 2014, a Reuters report stated that potential buyers for the unit included Brake Brothers, Booker Group and Sodexho, along with private equity firms.

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

It also announced an investment of €40m to expand a French Davigel factory in April 2013, which had sales of €783m in 2012.

Considered to be one of the world’s biggest food companies, Nestle announced in 2014 that it was considering the divestment of its underperforming businesses.

Following that, the company sold its brands, including PowerBar and Musashi, to US group Post Holdings, its US frozen pasta business to Brynwood Partners, and the bulk of its Jennie Craig business. It also divested a 10% stake in fragrance and flavour-maker Givaudan, and cut down its stake in L’Oréal by selling part of it back to the French cosmetics company.