In a move that business news source Bloomberg characterized as a “deal [that] overshadows other buyouts announced this year,” Unilever has agreed to sell its global Spreads business to private equity firm KKR in a transaction valued at €6.825 billion (approximately $8.1 billion USD).
“In April of this year we set out our 2020 program 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,” said Unilver CEO Paul Polman, in a press release. “The announcement today marks a further step in reshaping and sharpening our portfolio for long term growth. The consideration recognizes 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’s Spreads business, the company noted in its press release, includes major brands like Becel, Flora, Country Crock, Blue Band, I Can’t Believe It’s Not Butter, Rama, and even ProActiv. The Spreads business operates across 66 countries around the world, and in 2016, it had a turnover of €3.032 million ($3.59 million USD), EBITDA of €680 million ($8.06 million USD), and assets totaling €1.108 million ($1.31 million USD). The binding offer tendered by KKR—on a cash-free, debt free basis—will reportedly be funded by both the European and North American private equity funds of KKR.
“The strength of the portfolio of consumer brands in Spreads provides a firm foundation for future growth,” added Johannes Huth, Head of KKR EMEA. “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 offer, subject to certain regulatory approvals and employee consultation in certain jurisdictions, is expected to be approved by mid-2018.
Nicolas Liabeuf, CEO of Unilever’s Spreads business, will continue to lead the business. He added in the company’s press release: “There is a positive momentum in the performance of the Spreads business, and we are excited about continuing this journey with KKR. We are confident that our business and the entrepreneurial spirit of our people will thrive further under new ownership.”
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