Consumer goods giant Unilever has confirmed that it is selling its spreads business, which includes brands like Flora and Stork butter, in a bid to attract greater returns for shareholders and become more focused.
In a statement on Thursday, chief executive Paul Polman said that the “faster pace of change” that is occurring in the market is challenging Unilever “to set the bar higher”.
He said that the company was striving towards being “a leaner and more focussed business” and that as a result of a strategic review, the decision had been taken that the “future of the spreads business now lies outside the group”.
“We feel confident that the changes we are announcing today will accelerate the transformation of Unilever and the delivery of sustainable shareholder value over the long term," Mr Polman said.
In February, Kraft Heinz dropped a £115bn ($143bn) offer to buy Unilever after the latter said that the bid was too low and carried no “financial or strategic” merit.
A takeover would have been one of the biggest ever in corporate history, and the biggest ever acquisition of a UK-based company by a non-UK one, Thomson Reuters data showed at the time.
Kraft, which is the world’s fifth-largest food and beverage company, has in recent years already been forced to adjust its product range to consumers’ changing preferences and a trend towards fresher, non-packaged items.
In the wake of the failed takeover, some analysts said that Unilever may shift its focus to do the same, giving it the opportunity to enhance shareholder returns.
Also on Thursday, Unilever announced that it was launch a €5bn share buy-back programme and raising its shareholder dividend by 12 per cent.
The company said that this reflects “increased confidence in the outlook for profit growth and cash generation”.
“We will support our business with a higher level of leverage, while retaining the benefits of a strong credit rating,” the group said.
“This will enable us to enhance value for shareholders through increased capital returns, while maintaining operational and strategic flexibility.”
