ZEENAT MOORAD: Time for Unilever to use that lever
Unilever would do well to start pulling some levers, like divesting lacklustre tea brands or doing a big, fat acquisition to boost shareholder returns and deliver major cost savings
In February last year, when Kraft Heinz made its bid for Unilever, the maker of Magnum ice cream and Dove soap, made it clear the US food giant stood no chance, effectively letting Kraft Heinz know exactly where to stick its "acquire, slash costs and repeat" routine. Kraft Heinz, backed by corporate raiders Warren Buffett and private equity firm 3G, backed off, tail between its legs. But the overture put pressure on Unilever, whose operating profit margins were trailing most of its rivals, to make bold moves to accelerate growth and cut costs. It served as a wake-up call for the Anglo-Dutch giant to strengthen its defences. Nearly 18 months later, Unilever has offloaded its margarine and butter business to private equity giant KKR for €6.8bn and announced two multibillion-pound share buyback programmes. It’s working with Egon Zehnder, a global executive search firm, to find a successor for CEO Paul Polman. And in March the company announced it is choosing Rotterdam over London for i...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.