Valio sells its ice cream and baby food businesses to foreign buyers

Transaction secures Nestlé 40% share in Finnish ice cream market

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Valio, Finland's leading dairy product manufacturer, agreed on Monday to sell its ice cream and baby food businesses to foreign buyers. The Valiojäätelö ice cream business with its familiar penguin logo will be purchased by Nestlé, whereas the baby food operations with Tutteli and Muksu brands will be taken over by Europe's leading baby food producer, Royal Numico of the Netherlands.
      According to the letter of intent signed on Monday, multinational Nestlé will acquire Valio's ice cream business together with the long-term right of use to the Valiojäätelö trademark.
      The purchase will also include the Turenki ice cream plant with its grounds and machinery.
      Valio's UHT milk and milk powder production facilities in Turenki and Lapinlahti are excluded from the baby food deal. Numico only buys the baby food business and the rights to the trademarks Tutteli and Muksu, while Valio will continue the production as a subcontractor.
     
Previously Nestlé has already purchased the Finnish baby food trademarks Piltti and Bona. The acquisition of Valiojäätelö guarantees Nestlé a 40% market share in Finland. The deal will also double Nestlé Finland's turnover.
      In the future, two giants, Nestlé and Unilever's GB Glade, will dominate Finland's ice cream business. GB Glade has previously announced it aims for a 20-percent market share in Finland.
      Valio justifies the latest transactions with the desire to concentrate on the company's core business, production of milk-based dairy products and cheeses. Only 1.5 percent of all milk purchased by Valio is used in manufacturing ice cream and baby food.
      Last year, the net sales figures for Valio's ice cream and baby food operations stood at EUR 63 million and EUR 20 million respectively. Valio's total turnover in 2003 was EUR 1.6 billion.
      Valio and Nestlé intend to close the deal as soon as possible. With Numico, the plan is to sign an agreement by the end of September. Both contracts have to be approved by the Finnish Competition Authority.
     
Valio has produced ice cream in Finland since 1934.
      Two year's later Valio opened an ice cream bar in Helsinki's Lasipalatsi, where the assortment consisted of 18 different flavours.
      Today, Finns' annual ice cream consumption is the highest in Europe: 13.5 litres per capita.


Links:
  Royal Numico
  Valio
  Nestlé Nordic

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