British-Dutch food company Unilever wants to sell seven billion euros' worth of assets, including well-known brands like Becel. This should increase shareholder value, following Kraft Heinz' failed take-over bid.
Split among shareholders
Major investment firms like Bain Capital, CVC and Clayton Dubilier & Rice are allegedly preparing their own take-over bids, while Kraft Heinz is looking at the development with great interest. It may not have succeeded in its own attempted take-over, but perhaps it could now obtain sections of its previous target.
The idea to sell is a direct consequence of Kraft Heinz’ recent failed 130 billion euro bid, which the board resolutely turned down - causing a rift between the shareholders. Some wanted to maintain the company’s current course, focused on long-term development, while others also wanted short-term profit. The brand sale could result in short-term added shareholder value, which could be considered a charm offensive the latter.
Sometime next month, Unilever would reveal a new, more short-term strategy with possibly plans to cut costs more aggressively and pay shareholders more. This should make Unilever a harder target for others as well. Not only is it contemplating selling several brands, it is also considering possible acquisitions. Reckitt Benckiser’s household division, including brands like Vanish and Dettol, is one such target.
If it did decide to sell its margarine brands, it would spell the end of an era for Unilever, because they were part of the company since it was founded in 1930. Margarines and other spreads were already put into a separate division in 2014, which fueled sale rumours back then as well.