Food giants’ sweetener
Unilever reward investors
MARMITE makers Unilever yesterday unveiled an £11billion ploy to fend off a new takeover bid.
The Magnum ice cream and PG Tips owner rewarded investors with a plan to buy back £4billion of their shares and dish out an extra £380million via a 12 per cent dividend rise.
Bosses also confirmed moves to sell the struggling Flora and Stork spreads business for a potential £4.8billion and boost a cost-cutting drive by £1.7billion over the next three years.
The measures, together with a pledge to grow profit margins, come after Unilever saw off a £115billion approach by US giants Kraft Heinz.
Unilever also said they will examine their “dual-headed” set-up, under which they have HQs and stock market listings in both the UK and Holland. This is a legacy of the 1929 merger of British soap maker Lever Bros and Dutch firm Margarine Unie.
Bosses reckon the structure stops Unilever going for mega-takeovers of their own, especially in the US.
Dutch chief executive Paul Polman refused to rule out dumping their UK base for a single HQ in the Netherlands, adding: “We will be using the next nine months to study the pluses and minuses.”
Unilever also confirmed plans to shift the base for their food business to Holland, but insisted neither move was motivated by Brexit.
Polman also claimed the overhaul, and increased cost-cutting, wouldn’t mean large-scale job losses. Unilever employ 7000 people in the UK at 10 factories and two R&D sites.
One City analyst said the shake-up will “keep a potential bidder at bay”.
But Ian Forrest, analyst at The Share Centre, said the changes would make Unilever “more attractive”.