Unilever could divest spreads arm at approximate brand value; CD&R, CVC and Bain work on bids - reports
Unilever [LON:ULVR, AMS:UNA] would “happily” sell its underperforming margarine and spreads arm if it receives a bid approaching the value of the unit’s brands, a senior source linked to the business said, The Sunday Times reported.
The report said that the potential GBP 6bn (USD 7.4bn) sale would likely prove attractive to private-equity companies.
Inside sources said PE firms including Carlyle [Nasdaq:CG] and Advent International have been eyeing the spreads business for a number of years, the item reported.
Sources cited in a Sunday Telegraph report said private-equity firms Clayton Dubilier & Rice, CVC and Bain Capital are already preparing bids for Unilever’s spreads business. The division generates earnings of approximately GBP 480m, or around 4% of total revenues, the report said.
Unilever is speeding up a previously planned strategic review in the wake of a failed USD 143bn attempt to take over the business by US food giant Kraft Heinz [Nasdaq:KHC], the Times item reported. Measures to restructure and reduce costs are to be outlined next month, including the potential sale of the spreads unit, the report said.
Paul Polman, Unilever chief executive, was stridently opposed to any deal but more than half of Unilever’s shareholders are believed to have backed entering negotiations with Kraft Heinz, according to a report from brokers at Bernstein last week, the item reported.
Unilever’s spread brands include Stork and Flora.
The original reports appeared in The Sunday Times, Business section, page 1; and The Sunday Telegraph, Business section, page 1