Private equity heavyweights Blackstone and Clayton, Dubilier & Rice (CD&R) are evaluating potential bids for The Magnum Ice Cream Company N.V., the owner of iconic brands Ben & Jerry’s and Cornetto, according to sources cited by Reuters. The news sent Magnum shares soaring nearly 16% on Friday, putting the stock on track for its steepest single-day gain since its market debut.
Magnum only separated from Unilever less than six months ago, listing at a valuation of approximately €7.8 billion. After reaching a high of €16.50 earlier this year, the shares have since pulled back, now trading just above their initial offering price. This decline has captured the attention of buyout firms, which are closely monitoring the company’s performance ahead of the critical summer sales season.
The timing of the interest is strategic, as ice cream sales are heavily concentrated in the warmer months. According to Reuters, the private equity groups are tracking Magnum’s stock and waiting to assess summer sales data before making any final decisions. Neither Magnum, Unilever, Blackstone, nor CD&R have commented on the reports.
Magnum, headquartered in the Netherlands, trades on the Euronext Amsterdam, London Stock Exchange, and New York Stock Exchange under the ticker MICC. Unilever retained a stake of just under 20% after the spin-off, which it plans to sell gradually to cover separation costs and maintain financial flexibility.
Despite the stock’s recent weakness, Magnum’s latest trading update showed no significant red flags. First-quarter revenue came in at €1.77 billion, down 1.2% on a reported basis due to unfavorable foreign exchange movements. However, organic sales—the company’s preferred measure of underlying growth—rose 4.5% year-over-year. CEO Peter Ter Kulve stated that the company is “well set up for the summer season” and reaffirmed full-year guidance for organic sales growth of 3% to 5% and an improvement in underlying margins.
The potential buyout revolves around brand strength, market share, and opportunities to enhance profitability. Private equity firms see room to cut costs and boost margins, especially given the competitive landscape. Froneri, a joint venture between PAI Partners and Nestlé, was valued at around €15 billion in a recent deal, highlighting the sector’s appeal. Magnum holds a commanding 21% share of the $87 billion global ice cream market, far ahead of Froneri’s 11%, giving a buyer a substantial base for growth.
However, the company faces risks that could complicate a takeover. The rise of GLP-1 appetite-suppressing drugs has already begun to disrupt the snack and dessert categories, posing a potential headwind. Jack Martin, investment director at Oberon Investments, noted “regulatory headwinds against unhealthy foods” and the impact of GLP-1s as factors to watch. Additionally, Ben & Jerry’s social activism has drawn scrutiny from some investors, who recently raised concerns about the brand’s financial disclosures and governance. Magnum has defended its approach, stating it “respectfully disagrees” with those criticisms and remains committed to the brand’s social mission.
For potential bidders, the key question is whether summer sales deliver sufficient momentum in volume, pricing, and margins to justify a take-private bid. With the stock having lost ground since its peak, the window of opportunity may be opening for private equity to strike.
