2017-04-06 12:40:03
Unilever to Sell Its Spreads Business and Restructure

LONDON — Under pressure after spurning a blockbuster $143 billion takeover offer, Unilever said on Thursday that it would explore the sale of its spreads business, restructure two major divisions and buy back $5.3 billion in stock as it seeks to cut costs and appease investors.

The moves, which include overhauling its food and beverage operations, are meant to reassure investors who had seen the possibility of more grocery store shelf space and cost savings from the takeover bid in February by a fellow food giant, Kraft Heinz.

But Kraft Heinz withdrew its $143 billion offer for Unilever, the British-Dutch maker of Dove soap, Ben & Jerry’s ice cream, and Hellmann’s mayonnaise, in the face of public criticism and of resistance from its prospective partner.

Unilever said that the plans unveiled on Thursday would potentially unlock billions of dollars in savings and return billions more to shareholders by increasing its dividend 12 percent. The company also said it would seek to buy back 5 billion euros, or about $5.3 billion, in stock.

The changes were announced after a strategic review of the company’s operations, begun in February after the Kraft Heinz bid was withdrawn.

Paul Polman, the Unilever chief executive, said in a news release: “With the transformation of Unilever, we have built on a portfolio of strong and growing brands delivered to consumers across the world.”

“The faster pace of change that we are seeing in our markets and competitive set requires us to continue to set the bar higher,” he added.

The company has faced investor pressure to improve its profitability, particularly in light of the dropped Kraft Heinz deal. Unilever said that it would merge its foods and refreshments operations, which had a combined €22.5 billion in revenue last year.

Mr. Polman said that combining the two segments would lead to a leaner business “that will continue to benefit from our global scale and footprint.”

The spreads business, which includes the margarine brands Country Crock, Flora and I Can’t Believe It’s Not Butter, was merged two years ago with a baking and cooking segment in Unilever’s foods division. The company said that it had achieved modest growth in sales of its spreads in emerging markets last year, but that it was not enough to offset continued declines in developed markets, and it would seek to sell or separate the business.

“After a long history in Unilever, we have decided that the future of the spreads business now lies outside the group,” Mr. Polman said.

Over all, Unilever said it expected to achieve annual cost savings of €4 billion to €6 billion through the initiatives announced on Thursday and through previously announced cost cutting.

In February, Kraft Heinz made a takeover offer for Unilever, hoping to create a packaged food and consumer goods giant.

But Kraft Heinz’s board — including Warren E. Buffett and the Brazilian-born billionaire Jorge Paulo Lemann — withdrew the offer less than 48 hours later as it faced a potentially lengthy fight for Unilever.

At the time, Dutch and British politicians raised concerns about the potential impact of a Kraft Heinz-Unilever combination on jobs in their countries.

Unilever said then that the Kraft Heinz offer “fundamentally undervalues” the company. Later, it said the bid “highlighted the need to capture more quickly the value we see in Unilever.”