Marmite maker set for savage cuts after fending off Heinz

THE boss of Unilever may be forced to wield the axe and cut jobs and brands to stave off another takeover bid.

The Anglo-Dutch consumer goods firm fought off a £115bn approach from US food giant Kraft Heinz over the weekend.

But now analysts predict chief executive Paul Polman will be under pressure from shareholders to cut costs and boost profit margins to prevent a further takeover offensive.

If not, it is thought shareholders could demand Unilever takes action to improve its financial performance.

Polman, 60, has already set out a cost-saving plan, which included doubling his target for expanding Unilever’s margins – aiming for an increase of between 0.4pc and 0.8pc by 2019.

After the merger with Heinz in 2015, Kraft announced it was shutting seven manufacturing plants, which resulted in 7,000 jobs losses. Meanwhile its margin jumped from 18pc to 26pc.

Unilever, on the other hand, reported a profit margin in 2016 of 15pc. Julian Wild, head of food at law firm Rollits, said the approach from Kraft was bound to have set alarm bells ringing at Unilever. ‘Now Unilever is under the spotlight, the pressure will stay. It will have to have a pretty major review of its operations, including looking at people they employ and potentially selling part of the business,’ he said.

Kraft Heinz had to issue a statement on Friday saying it had made an offer to Unilever, which was rejected. It led to speculation the Government would step in to investigate a potential deal, and raised concerns over drastic cuts should the two companies combine. But on Sunday Kraft announced it had withdrawn the offer. Shares in Unilever tumbled 6.6pc, or 249p, to 3548p yesterday and there is speculation it could look to spin off some of its food brands, which includes Flora spreads, Colman’s Mustard and Marmite.

Under market rules, Kraft needs to wait six months before it can return to the table with another bid. But Martin Deboo, analyst at Jefferies, said the seismic shock at Unilever would reverberate for a while yet.

Meanwhile it is thought the offer, while unsuccessful, could fire the starting gun for further deal-making in the sector.

Unilever did not respond to a request for a comment.