Tuesday 17 July 2018

Bids slide in for Unilever's €7bn margarine and spreads business

Paul Polman, chief executive of the Anglo-Dutch giant.
Paul Polman, chief executive of the Anglo-Dutch giant.

Sarah Syed and Ruth David

Unilever has received offers for its margarine and spreads unit from bidders including a consortium of Bain Capital and Clayton Dubilier & Rice, according to people familiar with the situation.

A group consisting of Blackstone Group LP and CVC Capital Partners also made an offer for the underperforming spreads business, valued at around €7bn, said the people, who asked not to be identified because the process is confidential.

Buyout firm Apollo Global Management has placed a bid alone, they said.

KKR & Co and Singapore's sovereign wealth fund GIC Pte also are interested in the asset, the people said. Initial bids were due last Thursday.

Archer-Daniels-Midland Co, a US agricultural-trading house, said earlier in the month it was not bidding for the unit after the 'Sunday Times' newspaper reported that the Chicago-based company could team up with a private equity to bid for some of the operations.

Selling the unit is part of Unilever's effort to focus on faster-growing businesses such as Pukka Herbs tea and Sir Kensington's condiments after it fended off an unwanted takeover approach from Kraft Heinz.

Preparations for the company's exit from the spreads business are fully on track, chief financial officer Graeme Pitkethly said on Thursday on an analyst call following third-quarter results.

The unit's brands include Flora and I Can't Believe It's Not Butter!

Representatives for Unilever, Blackstone, CVC, CD&R, Bain, KKR and Apollo, declined to comment. Representatives for GIC didn't respond to requests for comment.

Unilever, the Anglo-Dutch maker of Magnum and Ben & Jerry's ice cream, and headed by chief executive Paul Polman. fell short of estimates for its third-quarter revenue growth, blaming bad weather for curbing demand for refreshments.

The company's underlying revenue rose 2.6pc, compared with the 4pc median estimate of analysts who were surveyed by Bloomberg.

In North America, revenue by that measure was down 2.9pc.

Bloomberg

Irish Independent

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