Liberum Capital analysts expect Unilever to sell its food arm, excluding the ice cream and beverage category, for an estimated figure of €14billion to fund a large acquisition in its home and personal care businesses, reports Food Navigator, adding Unilever would not comment on speculation.
"We expect Unilever at some point to implement a large accretive acquisition in the HPC (household and personal care) space and to partly fund it by selling it's the Food unit (excluding ice cream and beverages) which we estimate can be sold at about one times sales," said authors Pablo Zuanic and Lisa Hau. "Selling this lower growth component would improve the company's growth profile but at the same time, a deal in HPC would likely increase the company's franchise strength in the category (potential targets: parts of Clorox; Colgate; Beiersdorf; and or a cosmetics company)."
Unilever's business units comprise four categories: Home Care; Personal Care; Savoury, Dressings & Spreads; and Ice Cream and Beverages. Food brands include Knorr, Flora, Magnum and Lipton. "In food, the Unilever food categories are among the ones with the steepest price hikes in Europe. Oils and fats in June were up 7.8 percent, according to Eurostat (the highest increase among the categories for a which inflation data is provided." Fueling the rumor, in July last year, Unilever sold its Italian frozen foods business, Findus, for €805 million in July last year to a company part-owned by Birds Eye Iglo. In December it completed its acquisition of the Sara Lee Personal Care business for €1.285 billion. Its consumer tomato products business in Brazil was sold in March to Cargill for approximately €260 million, and in May Unilever acquired Albert Culver, the beauty and personal care company, for $3.7 billion.
