Global ice cream company Froneri is said to be close to finalising a deal to buy Fonterra's Tip Top ice cream business, according to the Australian Financial Review.
A report in the AFR's Street Talk column said Froneri - a join venture owned by Nestle and R&R Ice Cream was in "late-stage talks" to buy New Zealand's iconic ice cream brand.
A spokeswoman for Fonterra said bids for Tip Top closed on April 29 and the process was ongoing.
"We are pleased with both the number and the quality of the responses we have had for the sale of Tip Top."
But it would not be commenting on Froneri being the preferred bidder.
"This is a confidential process and we will not be responding to market speculation," she said.
In late March Fonterra chief executive Miles Hurrell said it expected to make an announcement on Tip Top before the end of its financial year on July 31.
Kiwi investment bank First NZ Capital is said to have run a two-stage auction style process with the parties in final talks on the deal which is expected to be worth $375 million.
Froneri is the second largest ice cream company in the world and its brands include Peters and Movenpick.
Fonterra announced the proposed divestment of Tip Top in December as part of an asset portfolio review and as the co-op seeks to reduce its debt.
While Tip Top was performing well, it had reached maturity as an investment for the co-operative, it said.
Tip Top has had several different owners over the years, after starting off as an ice-cream parlour in Wellington in 1936.
By 1962, its Mt Wellington plant had become the Southern Hemisphere's biggest ice-cream factory.
Two years later, Tip Top had expanded and a parent company - General Foods - was formed.
The company went to Goodman Fielder in 1987, Heinz in 1992, West Australia's Peters and Brownes in 1997, Kiwi Dairy Co in 2000, and to Fonterra in 2001.