Unilever (LON:ULVR) has inked a deal to sell its spreads business to KKR for €6.83 billion, the Anglo-Dutch consumer goods group has said. The company earmarked the division for disposal in an effort to unlock value for shareholders following the collapse of the Kraft Heinz bid earlier this year.
Unilever’s share price has been subdued in London in today’s session, having given up 0.15 percent to 4,189.50p as of 13:16 GMT. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index having climbed marginally higher in today’s session and currently standing 0.51 percent up at 7,528.72 points. The group’s shares have added just under a third to their value over the past year, as compared with about a seven-percent rise in the Footsie.
Spreads business sale
Unilever announced in a statement today that it had received a binding offer from KKR to purchase its global Spreads business for €6.825 billion on a cash-free, debt-free basis.
“In April of this year we set out our 2020 programme to accelerate sustainable value creation. After a long history in Unilever we decided that the future of the Spreads business would lie outside the Group,” the FTSE 100 group’s chief executive Paul Polman said in the statement, adding that today’s announcement marked “a further step in reshaping and sharpening our portfolio for long term growth”.
The sale comes as Unilever looks to simplify its structure and unlock value for shareholders in the wake of the failed Kraft Heinz bid earlier this year. Last month, news emerged that the company was considering a single corporate structure.
Analysts weigh in
“At last the market has the deal that it wanted, on the market’s desired terms”, Jefferies analysts commented today, as quoted by Reuters adding that “the positive takeaway for bulls like us is that Unilever is willing to continue to slay sacred cows, in pursuit of growth and value”.