Unilever today (19 July) announced the sale of frozen-food business Findus Italy to Birds Eye Iglo for a cool EUR805m.

The deal signals Unilever's exit from frozen food (except, of course, from ice cream) and appears to benefit both the consumer goods giant and Birds Eye Iglo, one of Europe's largest frozen-food manufacturers.

Unilever sold off the bulk of its European frozen-food operations, including Birds Eye and Iglo, in 2006 to private-equity group Permira but hung on to Findus Italy because it was integrated with its ice-cream business in the country.

However, in April, Unilever signalled it wanted to put Findus Italy on the block to focus on its "core" business in the country - including ice cream - a move that attracted interest not just from Permira and Birds Eye Iglo but also from Lion Capital, the private-equity owners of rival frozen-foods firm Findus Group.

Lion Capital's Findus family includes the rights to the Findus brand in the UK and markets in Scandinavia, plus UK seafood businesses Young's and The Seafood Company.

The private-equity firm's interest in Findus Italy had been confirmed but, ultimately, it lost out to rival Permira, which, according to reports, secured around EUR500m in loans to fund the deal.

In a statement, Birds Eye Iglo described the acquisition of Findus Italy as a "reunion" of the two companies and talked up the formation of "an unrivalled frozen food offer across Europe".

Birds Eye Iglo CEO Martin Glenn said: "The transaction creates a clear European leader in the frozen food industry with an unrivalled product range and solid growth opportunities."

At the time of writing, Birds Eye Iglo officials could not be reached for further comment. However, the deal represents a step forward for the company, landing it a business that accounts for around a third of the frozen food sector in Italy.

Birds Eye Iglo will take on Findus Italy's factory in Cisterna, some 50 kilometres south-east of Rome, and brands including and 4 Salti in Padella, Sofficini, Capitan Findus.

The Datamonitor statistics indicate "stable rates of growth" within Italy's frozen-food market between 2005 and 2009, with a compound annual growth rate (CAGR) of 2.8%. In 2009, sector sales stood at US$6.8bn.

Over the same period, Germany, the largest frozen-food market in Europe, saw the sector grow faster, with a CAGR of 4.6% to reach sales of $9.3bn.

In France, the fourth-largest market behind the UK and Italy, sales rose to $5.6bn after a CAGR of 2.3% between 2005 and 2009.

Looking ahead, Datamonitor has forecast Italy's frozen-food sector to grow at a CAGR of 2.9% between 2009 and 2014, with Germany growing at 5% but France slower at 2.7%.

Nevertheless, overall, the acquisition of Findus Italy seems to have given Birds Eye Iglo a well-established business, with a strong brand (Euromonitor data lists Findus as the largest frozen-food brand in Italy in 2008) and a company that enjoys 33.7% of the value of the category in Italy, according to figures from Datamonitor.

Growth may be less than stellar, and there may be signs that private label has made inroads in the Italian frozen-food sector (Euromonitor claims that Unilever's share of the market in value terms fell by one percentage point in 2008 due to own-label competition) but Birds Eye Iglo has bought a business with strong credentials.

What's more, given Birds Eye Iglo's position in the frozen-food sector, the company should also be able to extract synergies from the transaction.

The latter point could be deemed particularly pertinent, given that some analysts believe that Unilever got a good price from Birds Eye Iglo for Findus Italy.

Kepler Capital Markets Jon Cox said Unilever had secured a "reasonable price" for Findus Italy. "They didn't do too badly."

Cox said the sale was part of the "slow transformation" of Unilever's portfolio in western Europe to focus on businesses with better growth prospects.

Under former chief executive Patrick Cescau and then current boss Paul Polman, Unilever has restructured its business in the region, streamlining its operations, cutting costs and paying more attention to the more buoyant parts of the food sector.

That outlook is also taking in more dynamic parts of the wider consumer-goods space. Unilever is currently waiting on the EU to decide on its planned US$1.3bn acquisition of Sara Lee's body-care business.

Brussels, which said a first look at the planned deal suggested possible competition problems in areas such as deodorants and fabric care, will decide whether to block or approve the transaction on 5 October.

Unilever will no doubt be hoping for that piece of M&A to go (almost) as smoothly as the sale of Findus Italy.