Banks Line Up $6 Billion of Debt for Nestle Ice Cream Unit Sale

(Bloomberg) -- Lenders including Credit Suisse Group AG, Deutsche Bank AG and Goldman Sachs Group Inc. are in talks to provide as much as $6 billion of debt to help finance Froneri International Ltd.’s buyout of Nestle SA’s U.S. ice cream business, according to people familiar with the matter.

The debt ultimately offered to investors may include leveraged loans and bonds in U.S. dollars and euros and could launch as soon as the first quarter of 2020, said the people.

Representatives for Credit Suisse, Deutsche Bank and Froneri declined to comment. Goldman Sachs did not respond to a request for comment.

Nestle agreed to sell the business, which includes brands like Haagen-Dazs and Drumstick, to its joint venture with private equity firm PAI Partners for $4 billion. That venture, known as Froneri, is rated Ba3 by Moody’s Investors Service and B+ by S&P Global Ratings. It has about 1.8 billion euros ($2 billion) of outstanding debt, according to data compiled by Bloomberg.

Froneri was created in 2016 when Nestle merged its European ice cream business with PAI-owned R&R Ice Cream, and it’s now expanding to create a stronger challenger to Unilever Plc, the global leader in ice cream with the Ben & Jerry’s and Magnum brands.

A representative for PAI also declined to comment.

The debt is one of several acquisition financing deals that may hit the leveraged lending market early year. Also expected is a multibillion sale for the take-private of Zayo Group Holdings Inc.

Bankers are also working on debt packages for the take-private of EI Group Plc, the potential buyout of Cobham Plc and Banijay Group’s acquisition of Endemol Shine.

©2019 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.