Unilever Considers its Next Move After Failed Takeover Bid

27 Feb 2017 — Following the attempted takeover bid from US giant Kraft Heinz, Unilever is considering a cull of some of its food brands, according to city reports which claim the Anglo-Dutch consumer goods company is feeling pressure to react after it rejected the offer. In an official statement, Unilever says it is “conducting a comprehensive review of options” due to be completed by April. This follows the events of last week when Kraft Heinz Co. withdrew its US$143 billion bid for Unilever two days after the approach became public and Unilever’s opposition to engage in discussions.

Kraft Heinz blamed its withdrawal on early deal leaks, which it said thwarted efforts to negotiate a merger on a friendly basis.

Since then speculation has been growing as to Unilever’s next move with some reports angling towards a break-up of the company or sell-off or shake-up of some well-known brands like Bertolli and Flora.

The spreads alongside I can’t Believe its so Good - known as I Can’t Believe it’s not Butter until earlier this month when it rebranded itself as a more versatile product, appealing to consumers as a baking and frying ingredient with a lower saturated fat as well as a spread - are not doing so well.

This is all against a backdrop of falling interest in spreads in general as consumers favor healthier alternatives.

Any type of brand sale would let Kraft Heinz or any other business acquire some of Unilever’s food business without getting into a full takeover. 

Other moves being considered by Unilever, according to reports, include a possible spin-off of its food business into a separate listing. This would mean clearer differentiation between the higher earnings of Unilever’s home and personal care division including the like of Dove soap, Persil, Domestos and Lynx brands and the slower food division. 

Unilever’s full statement reads: “Unilever is conducting a comprehensive review of options available to accelerate delivery of value for the benefit of our shareholders. 

“The events of the last week have highlighted the need to capture more quickly the value we see in Unilever. We expect the review to be completed by early April, after which we will communicate further.”