Unilever confirms talks to sell food arm
FTSE 100 giant Unilever has confirmed it is in talks to offload its foods business, which includes iconic brands like Hellman’s and Marmite.
The mayonnaise-maker said it has received an offer from US seasoning manufacturer McCormick and is now in discussions with the firms.
The company has been prioritising its €13bn (£11.2bn) beauty and personal care brands following the arrival of new boss Fernando Fernandez, as the firm undergoes a cost-cutting drive.
Unilever said: “The board believes Foods is a highly attractive business, with a strong financial profile led by market-leading brands in growing categories and is confident in the future of the Foods business as part of Unilever.”
Responding to “media speculation” around a deal, the firm said: “There can be no certainty that any transaction will be agreed.”
Shares in the company jumped one per cent following the announcement, to 4,631p, leaving the stock down four per cent in the year so far.
Unilever unveiled plans last year to spin off its Ben & Jerry’s ice-cream brand and opted to list in Amsterdam, in a blow to the London Stock Exchange.
The firm had been considering further spin-offs of some of its best-known brands including Marmite in recent days, according to Bloomberg.
Unilever had also held talks with Kraft Heinz, according to reports, over a deal which would have united mayonnaise and ketchup, but has since walked away from any agreement.
The megamerger – between Unilever’s food brands and Heinz’s condiments division – would have created a new entity worth billions of dollars, the Financial Times reported.
Turnover dips despite cost-cutting
Despite cost-cutting plans which had cost thousands of jobs, the company reported a dip in turnover in the last year, down four per cent to €50.5bn.
Unilever’s beauty and wellbeing arm saw the softest dip in turnover, down 2.3 per cent, while its foods and home care saw bigger drops of 3.2 and 6.4 per cent.
Fernandez had said that “slowing markets” were to blame for the modest results, as he insisted that his turnaround was delivering a “simpler, sharper and faster Unilever”.
The company spent €599m on its restructuring in the last year, 1.2 per cent of turnover, although this was less than the €710m spent in the year prior.
The food and consumer goods giant was formed in 1930 following a merger between Dutch margarine maker Unie and British soap producer Lever, and is headquartered in London.