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Ben & Jerry's and Häagen-Dazs could serve up IPOs

Illustration of ice cream cone with a $100 bill sticking out of the side.

Illustration: Eniola Odetunde/Axios

Unilever, Nestlé and sponsor PAI Partners are likely to take their ice cream businesses public rather than sell, sources familiar with the situation say.

Why it matters: Deal valuations haven't quite recovered yet, but the public markets are opening up.

State of play: Unilever owns frozen treat brands Ben & Jerry's, Magnum, Wall's, and Yasso. Nestlé and PAI control Häagen-Dazs, Drumstick, Extrême, Nuii, Outshine, and Rowntree via their JV Froneri.

Catch up quick: Unilever announced plans in March to separate its ice cream business, with revenue of €7.9 billion in 2023, by the end of 2025.

  • Nestlé and PAI were considering a dual-track process for Froneri, per Bloomberg.

Behind the scenes: While the owners would prefer to cash out in a sale, the businesses would likely fetch more money as public entities, the sources say.

  • The likeliest buyers for these assets are private equity firms — which may balk at paying a premium, given limited exit options.
  • Strategics will likely not be buyers for the foreseeable future given the effort they're taking to unload them, they say.

What they're saying: Unilever pointed to a previous statement, reiterating a demerger of the ice cream unit was the most likely route, though other options would be considered.

  • Nestlé and PAI declined to comment.

Context: The units would likely go for a valuation in the billions, which could be difficult for one PE firm to swallow by themselves and require a partnership.

Zoom in: Between marquee brand names and billions in revenue, both Froneri and Unilever's ice cream division led by Ben & Jerry's make ideal public market candidates.

Caveat: Ice cream sales by volume have been in decline, hence why the CPG conglomerates are extracting the divisions from their results.

  • The businesses also don't have many synergies with the manufacturing and distribution of shelf-stable products.
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