Fonterra, a New Zealand based dairy co-op, has announced the sale of its popular Tip Top ice cream brand to Froneri - the third largest ice cream manufacturer in the world.

The announcement has been made today, Monday, May 13.

Froneri - which is headquartered in the UK - operates in over 20 countries and produces a number of well-known ice cream brands such as Oreo, Kit Kat, Daim and Rowntrees.

Fonterra CEO Miles Hurrell described the sale as a "bittersweet moment for Fonterra".

The sale of Tip Top was in line with Fonterra's plan to reduce its debt by NZD$800 million by the end of the financial year.

According to Miles Hurrell, the popularity of the brand "came through in both the number and quality of bids it received".

"It’s a fantastic brand and, as a result, we have secured a good price for our farmers and unit holders," he said.

Froneri purchased the brand from Fonterra for a massive $380 million which equates to approximately €220 million.

Commenting on the sale, Miles Hurrell said: “One of the big attractions for Froneri is the fact that Tip Top and Kāpiti ice cream both use fresh milk and cream from New Zealand grass-fed cows.

We’ve signed an agreement with the new owners to supply milk which ensures that Fonterra farmers will continue to be part of the Tip Top story.

“We will also retain full global ownership of the Kāpiti brand and will be licensing its use for ice cream to Froneri. This means our popular Kāpiti cheese isn’t going anywhere.

“I get the strong connection New Zealanders have with Tip Top. It will be important for them to see that it’s in good hands.

“It’s been a privilege being the guardians of Tip Top, but it’s time to hand the baton to new owners. The well-loved brand needs continuing investment and focused ownership to be sustainable for generations to come. It’s not something we’re in a position to do right now."

Fonterra had been the owners since 2001 and the sale marks a new chapter for the brand.

The Future

Touching on the future for the brand, Froneri CEO, Ibrahim Najafi, said: “We have always admired Tip Top as New Zealand’s favourite and most trusted ice cream brand.

"The acquisition enhances our scale and supports our vision to build the world’s best ice cream company."

The settlement date has been set for May 31, 2019; however, there will be a transition period over a number of months and it will be business as usual until then.