Unilever Looking To Sell 'I Can't Believe It's Not Butter,' Other Spreads

(RTTNews) - Unilever plc ( UN, ULVR.L, UL) has decided to explore a sale of its spreads business, the company said last Thursday.

The company also announced the restructuring of two major divisions, and said it will review its dual-headed legal structure, raise its dividend by 12 percent and launch a share buy-back of 5 billion pounds this year.

"After a long history in Unilever, we have decided that the future of the Spreads business now lies outside the Group. We will look to increase our strategic flexibility for further portfolio optimisation through a review of the dual-headed legal structure, with a view to simplifying it," the Anglo-Dutch consumer company said in a statement.

Unilever's decision to sell the spreads business is part of a slew of cost-cutting and restructuring measures and is said to have come under shareholder pressure in response to the company's rejection of a $143 billion takeover bid from U.S. food giant Kraft Heinz.

"The faster pace of change that we are seeing in our markets and competitive set requires us to continue to set the bar higher," Paul Polman, chief executive officer of Unilever said.

To boost shareholders' support, Unilever said in late February that it is conducting a comprehensive review of options available to accelerate delivery of value for the benefit of shareholders.

The spreads business, which includes brands such as "Flora margarine," "Stork butter," and "I Can't Believe It's Not Butter," had generated sales of 3 billion euros last year. However, the business does not include Hellmann's mayonnaise or Marmite.

In 2015, Unilever set up a separate Baking, Cooking and Spreads unit to allow greater focus on the issues facing the business. The company noted that the unit had responded well to this focus, reducing costs, increasing cash generation and holding market share.

"However, the underlying category remains challenged in developed markets and we have now taken the decision to launch a process to either sell or demerge Spreads," Unilever said.

The company expects total restructuring costs for the accelerated programs, including both the new initiatives and ongoing activities, to be around 3.5 billion euros for the 2017-2019 period.