Nestlé has reached an agreement with PAI Partners to create a joint venture for the former’s frozen pizza business in Europe with an intent to create a dedicated player in the pizza category.

The Swiss food and drink processing conglomerate alongside the private equity firm will hold onto equal non-controlling stakes in the joint venture and equal voting rights.

PAI Partners will take part in the joint venture through its PAI Mid-Market Fund (PAI MMF).

Financial terms of the transaction were not revealed.

According to Nestlé, its pizza operations span various countries in Europe and have annual sales of approximately CHF 400 million.

Its pizzas are sold by brands such as the Wagner, Garden Gourmet, and Buitoni brands, with distribution in Germany, Italy, France, Switzerland, Spain, Austria, Portugal, The Netherlands, and Belgium.

The frozen pizza joint venture will be based in Germany and managed by a seasoned and strong management team, said Nestlé. It will run two manufacturing facilities which are located in Nonnweiler in Germany and Benevento in Italy.

The proposed frozen pizza joint venture between Nestlé and PAI Partners follows their launch of the Froneri ice cream manufacturing joint venture in 2016.

Frédéric Stévenin — PAI Partners Managing Partner said: “This transaction is testimony to our relationship with Nestlé and brings together Nestlé’s iconic brands with PAI’s depth of expertise in creating leaders in Food & Consumer. We are delighted to once again partner with Nestlé to replicate our previous success.”

The frozen pizza joint venture will include only Nestle’s frozen pizza operations in Europe.

Nestle’s pizza business in the US is not part of the partnership and will be an integral part of the Swiss group’s frozen food operations in the country.

Marco Settembri — Nestlé Executive Vice President and Chief Executive Officer Zone Europe said: “We took a thorough look at our European pizza business and concluded that partnering with PAI provides the best platform to develop its full potential.

“Nestlé will remain invested in this business and participate in future growth and value creation as the joint venture continues to provide the very best pizza for consumers and retail partners.”

The closing of the joint venture deal, which is subject to consultations with employees and regulatory approvals, is likely to close in the latter half of this year.

  Frédéric Stévenin, Germany, Marco Settembri, Nestle, PAI Partners, pizza