Unilever has agreed to sell its margarine and spreads business to U.S. private equity firm KKR for 6.83 billion euros ($8.04 billion) to concentrate on faster growing products.
The maker of Knorr soup and Dove soap announced the deal on Friday, hours after Reuters reported that KKR had entered exclusive talks to buy the shrinking business after outbidding rivals.
The brands to be sold include Becel, Flora, Country Crock and Blue Band. Unilever put the business up for sale in April, following a review of its assets prompted by February’s unsolicited $143 billion takeover attempt by Kraft Heinz.
“The announcement today marks a further step in reshaping and sharpening our portfolio for long-term growth,” said Chief Executive Paul Polman. “The consideration recognizes the market leading brands and the improved momentum we have achieved.”
The spreads business has been in decline for years as people eat less bread and margarine, but Unilever has taken steps to stem the decline and the unit is very profitable. That made it attractive to private equity firms who were the main bidders in the auction run by Goldman Sachs and Morgan Stanley.
Based in New York, KKR had $153 billion in assets under management as of the end of September. The firm has a long history in the consumer sector and it has investments in India’s Coffee Day Resorts and Chinese white goods maker Qingdao Haier. Earlier this year, KKR bought majority control of vitamin maker Nature’s Bounty.
The deal with Unilever is expected to close mid-2018, subject to regulatory approvals and employee consultations.
Unilever, whose sales unexpectedly slowed in October, said it plans to return the cash to shareholders, unless more value-creating acquisition options arise.
This year Unilever has snapped up small brands including Tazo tea, Sundial Brands and Carver Korea.
Unilever said last month it favored ending its dual Anglo-Dutch structure to become a single entity, but it has delayed a decision whether it would be based in Britain or the Netherlands.
By Greg Roumeliotis
Source: Reuters
After eight years with Nestlé, François-Xavier Roger, executive vice president and chief financial officer (CFO), has decided to leave the company to pursue new professional challenges, making way for finance boss Anna Manz. Meanwhile, Unilever announced that Graeme Pitkethly, CFO, will retire by the end of May 2024, and the hunt is on for his successor.
International spirits company Bacardi Limited has announced the appointment of Alicia Enciso to its board of directors. Enciso joins with more than 30 years of experience with multinational Fortune 100 Companies in the food and beverage sector with roles as general manager, president, chief marketing officer and e-business officer.
According to Innova Market Insights, when it comes to beverages, consumers are willing to pay more for what they value most, despite rising inflation. Additionally, consumers want brands that respond to their core values and have the benefits they seek, such as sustainability and functional ingredients.