Unilever ‘could be planning’ to sell off major spread brands
April 04, 2017
Anglo-Dutch consumer goods giant Unilever could be planning to sell its major spread brands, including Flora margarine and Stork butter, to improve investor margins following a failed US$143bn takeover bid by American food company Kraft Heinz in February.
According to the Sunday Times on 18 March and other media reports, the company was preparing to sell some underperforming businesses in a £6M (US$7.5M) auction as it planned to publish a strategic review this month.
Changing consumer behaviours had led to a slowdown in the spreads market, which reportedly had caused the margarine line to end up on the chopping block.
American food company Kraft Heinz dropped a US$143bn offer to acquire the company in February, after Unilever said it saw “no merit, either financial or strategic” in the sale.
Kraft Heinz said in a statement on 19 February that it had withdrawn its proposal “amicably” and that the companies held each other in high regard.
"Our intention was to proceed on a friendly basis, but it was made clear Unilever did not wish to pursue a transaction. It is best to step away early so both companies can focus on their own independent plans to generate value," Kraft Heinz spokesman Michael Mullen said at the time.
Unilever is also facing a court case in South Africa, as the country’s Competition Commission found on 1 March that the company had colluded with Malaysian conglomerate Sime Darby in the manufacture and supply of baking and cooking products.
Commissioner Thembinkosi Bonakele said that between 2004 and 2013, Unilever and Sime Darby allegedly entered into an agreement not to compete on certain packs of margarine and edible oils.
Unilever could face a fine of 10% of its annual turnover.