{"id":12099,"date":"2017-04-06T12:27:13","date_gmt":"2017-04-06T11:27:13","guid":{"rendered":"https:\/\/nationalwire.com.ng\/?p=12099"},"modified":"2017-04-06T12:27:13","modified_gmt":"2017-04-06T11:27:13","slug":"unilever-sells-margarines-unit","status":"publish","type":"post","link":"https:\/\/nationalwire.com.ng\/sub\/unilever-sells-margarines-unit\/","title":{"rendered":"Unilever sells margarines unit"},"content":{"rendered":"

Dutch-British consumer products giant Unilever on Thursday announced the surprise sale of its underperforming margarine division, seeking to soothe investor jitters after spurning a takeover bid by US rival Kraft Heinz.<\/p>\n

The Rotterdam-based group said it is also planning to boost dividends in 2017 by 12 percent and will launch a shares buy-back of some five billion euros ($5.3 billion) by the end of the year.<\/p>\n

\u201cAfter a long history in Unilever, we have decided that the future of the spreads business now lies outside the group,\u201d chief executive Paul Polman said in a statement.<\/p>\n

The move came amid a company review launched in the wake of an out-of-the-blue takeover bid in February by US food and beverage giant Kraft Heinz.<\/p>\n

\u201cThe Kraft Heinz bid was a massive wake-up call. Unilever realised it needed to do more for shareholders, but it also has to improve margins,\u201d said analyst Neil Wilson, at EXT Capital.<\/p>\n

One poll showed that only half of the company\u2019s shareholders had agreed with Polman\u2019s flat-out refusal to even consider Kraft\u2019s offer.
\nWith the moves announced on Thursday, Unilever \u201cwants to make sure shareholders are not tempted by another bid and is throwing cash at the problem,\u201d Wilson added, warning it \u201csmacks a little of short-termism.\u201d<\/p>\n

Unilever\u2019s margarines and spreads include such household names as Flora, and Stork along with Blue Band and Rama.<\/p>\n

It was set up as a separate unit in 2015 but \u201cremains challenged in developed markets and we have now taken the decision to launch a process to either sell or de-merge spreads,\u201d the company said in its statement.<\/p>\n

\u2013 Fending off unwelcome bids \u2013<\/strong><\/p>\n

The latest moves are aimed at making the company more attractive to investors and forestall any further unwelcome advances from rivals.
\nIn February, Unilever snubbed an offer of an 18-percent premium on its share price from Kraft saying it \u201cfundamentally undervalued\u201d the group.<\/p>\n

The bid, which had valued Unilever at a whopping $143 billion, had \u201cno merit, either financial or strategic, for Unilever\u2019s shareholders. Unilever does not see the basis for any further discussions,\u201d it said at the time.<\/p>\n

Kraft\u2019s pursuit of Unilever would have merged the maker of Kraft cheese and Heinz ketchup with its European counterpart, whose products include Q-tips, Hellmann\u2019s mayonnaise and Ben & Jerry\u2019s ice cream. Unilever also has an extensive personal care section, including such brands as Dove.<\/p>

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Advertisement<\/div>\r\n\t\t\t\t\t\t\t<\/a>\r\n \r\n\t\t\t\t\t\t\t<\/div>\n

Global food companies have been struggling with anaemic economic growth in many key markets amid changing and health-conscious lifestyles.
\n\u201cThe reality of 21st century life is that people are more likely to grab breakfast \u2018on the go\u2019 rather than sit around the table with a few slices of toast,\u201d said George Salmon, equity analyst at Hargreaves Lansdown.<\/p>\n

While the sale of the spreads unit may \u201cgrab the headlines\u2026 the big news for shareholders is the more aggressive plans for increasing profitability,\u201d he added.<\/p>\n

\u2013 Dual-listing review \u2013<\/strong><\/p>\n

Unilever also intends to look at changing its historic status as a dual-listed company in two countries.<\/p>\n

It is listed in both London and on the Amsterdam AEX, where its share price Thursday were up 0.75 percent at 46.92 euros a share.<\/p>\n

As part of the review, the company found that \u201cour dual-headed \u2026 legal structure adds complexity when undertaking such change,\u201d the statement said.<\/p>\n

Unilever was looking at it \u201cwith the objective of achieving greater simplification and strategic flexibility.\u201d<\/p>\n

Unilever would not change its long-term business model, which he described as one of \u201csustainable value-creation,\u201d Polman told the BBC\u2019s Today programme.<\/p>\n

But alluding to the failed takeover bid, he said \u201cthe events of the last few weeks have pointed out that we have opportunities to drive further value in the business\u201d.<\/p>\n

Unilever chairman Marijn Dekkers said the review, to be completed by the end of the year, had \u201cbeen detailed and comprehensive\u201d.<\/p>\n

\u201cIt has confirmed that our model of long-term shareholder value creation has been successful and remains as valid as ever,\u201d he added<\/p>\n","protected":false},"excerpt":{"rendered":"

Dutch-British consumer products giant Unilever on Thursday announced the surprise sale of its underperforming margarine division, seeking to soothe investor jitters after spurning a takeover bid by US rival Kraft Heinz. The Rotterdam-based group said it is also planning to boost dividends in 2017 by 12 percent and will launch a shares buy-back of some …<\/p>\n","protected":false},"author":11,"featured_media":12100,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[17],"tags":[1670],"coauthors":[2392,2393],"class_list":["post-12099","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-news","tag-unilever"],"yoast_head":"\nUnilever sells margarines unit - National Wire<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationalwire.com.ng\/sub\/unilever-sells-margarines-unit\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Unilever sells margarines unit - National Wire\" \/>\n<meta property=\"og:description\" content=\"Dutch-British consumer products giant Unilever on Thursday announced the surprise sale of its underperforming margarine division, seeking to soothe investor jitters after spurning a takeover bid by US rival Kraft Heinz. 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