Unilever agreed to sell its margarine and spreads business to KKR & Co. for €6.83 billion, ridding the Anglo-Dutch consumer-goods giant of one of its worst-performing units as it focuses on faster-growing food and personal-care niches.
The private equity firm’s purchase of the division, whose brands include Flora and I Can’t Believe It’s Not Butter!, is the biggest leveraged buyout announced in Europe this year.
Completion is expected in the middle of 2018, the companies said in a statement Friday.
Reshaping Portfolio
The sale advances Chief Executive Officer Paul Polman’s effort to focus Unilever on smaller but faster-growing brands such as Pukka Herbs tea and Sir Kensington’s condiments.
The company, like rivals such as Nestlé, is grappling with changing tastes that mean some of its older products are out of favour as consumers seek fresher, healthier alternatives.
The London- and Rotterdam-based company is under pressure to simultaneously cut costs and accelerate sales after fending off an unsolicited, $143 billion takeover bid this year from Kraft Heinz.
The sale “marks a further step in reshaping and sharpening our portfolio for long-term growth,” Polman said.
Historic Deal
KKR beat out competition from Apollo Global Management and CVC Capital Partners, according to people familiar with the situation. CVC and Apollo declined to comment.
The deal overshadows other buyouts announced this year. After a long takeover quest, private equity firms Bain Capital and Cinven acquired German pharmaceutical maker Stada for €5.4 billion including debt in August. In September, Hellman & Friedman agreed to buy payment processor Nets for about 33 billion Danish kroner.
In selling the spreads unit, Unilever is parting with one of its most historic businesses.
The world’s first margarine factory was founded in the Netherlands in 1872, and it merged with a rival business in 1927 to form Margarine Unie. Two years later, the combined company joined UK soap-maker Lever Brothers to form Unilever.
Nicolas Liabeuf, CEO of the spreads business, will remain in that position, Unilever said.
Unilever shares have returned 27% this year including dividends, outpacing the 12% return for the Stoxx 600 Personal & Household Goods Index.
News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.
