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Nestle to Cut Jobs After Acquisition of Dreyer's

June 28, 2003|From Bloomberg News

Nestle plans to spend $150 million this year and in 2004 to cut jobs and combine factories at its U.S. ice cream business after buying Oakland-based Dreyer's Grand Ice Cream Inc. for $2.8 billion.

Nestle, which completed the acquisition Thursday, would not say which plants would be targeted for closing.

The changes, which also include $47 million in asset write-downs and charges for combining the companies' delivery networks, will produce savings for the Vevey, Switzerland, company of $185 million annually by 2006, Chief Financial Officer Wolfgang Reichenberger said in a conference call.

"These estimates are conservative," Jim Singh, Nestle's senior vice president of acquisitions, said during the call.

Nestle, the maker of Haagen-Dazs, and Dreyer's will control about a fifth of the $21-billion U.S. ice cream market. The Federal Trade Commission on Wednesday dropped objections to the transaction after challenging it as a threat to competition in the market for "super- premium" ice cream. Nestle agreed to sell three Dreyer's brands to win FTC approval.

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