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Unilever to sell spreads business to KKR for EUR6.8bn

FBR Staff Writer Published 18 December 2017

Unilever has agreed to sell its margarine and spreads business to investment firm KKR for €6.825bn in an all-cash deal.

Earlier this year, Unilever disclosed that the future of its spreads business lies outside the group after a review under its 2020 programme which has the objective to accelerate sustainable value creation.

The spreads business of Unilever comprises brands like Becel, Blue Band, Flora, Rama, I Can’t Believe It’s Not Butter, Country Crock and ProActiv.

It has operations in 66 countries and had registered a turnover of €3.03bn in 2016. The assets of Unilever’s spreads business are worth €1.1bn.

Unilever CEO Paul Polman said that the transaction with KKR marks a further step in reshaping and sharpening the company’s portfolio for long term growth.

Polman added: “The consideration recognises the market leading brands and the improved momentum we have achieved. I am confident that under KKR’s ownership, the Spreads business with its iconic brands will be able to fulfil its full potential as well as societal responsibilities.”

Unilever says that it plans to return the net proceedings of the sale to its shareholders, unless it comes across more value-creating acquisition alternatives.

KKR will be funding the transaction amount by using its European and N. American private equity funds.

KKR EMEA head Johannes Huth said: “The strength of the portfolio of consumer brands in Spreads provides a firm foundation for future growth.

“We look forward to deploying our global network and operational expertise to support the business’s growth ambitions, while continuing to follow Unilever’s responsible sourcing policies, including working towards the goal of sourcing 100 per cent sustainable palm oil by 2019.”

The transaction is anticipated to be completed in mid-2018 and is subject to certain regulatory approvals and employee consultation in certain regions.

In late September, Unilever had made a $900m deal to divest its South African spreads business to Remgro.

Image: Unilever to sell spreads business for €6.8bn. Photo: courtesy of Unilever.