Kuala lumpur: Nestle (Malaysia) Bhd experienced a significant rise in its share price during early trading on Friday, following reports of its intention to explore the sale of its ice cream business to Froneri, a prominent global ice cream company with operations in over 20 countries.

According to BERNAMA News Agency, Nestle Malaysia's shares climbed 40 sen, reaching RM109.90, with 300 shares traded by 9.43 am. This development comes after the company's ultimate parent, Nestle SA, entered advanced negotiations to sell the remainder of its global ice cream operations to Froneri.

The company announced in a filing with Bursa Malaysia that the divestment process would involve rigorous due diligence, comprehensive engagement with local stakeholders, and strict compliance with all relevant legal, regulatory, and governance standards.

MBSB Investment Bank Bhd commented on the potential sale, noting that it aligns with Nestle's global strategy to focus on higher-growth and structurally resilient categories. The bank emphasized that Nestle Malaysia benefits from strong brand recognition, a robust distribution network, and stable domestic demand.

MBSB Investment Bank Bhd further highlighted that if the divestment proceeds, it could enhance category focus, potentially supporting earnings quality and margin sustainability in the medium term. However, the financial impact will depend on the execution details and transaction terms. The bank maintained its 'sell' recommendation for Nestle Malaysia, with an unchanged target price of RM94.50.

Source: BERNAMA News Agency