Troubled Unilever set to empty its larder

Unilever, the Anglo-Dutch consumer goods conglomerate, has been embattled for the best part of a decade, subject to frequent – actual or rumoured – attempts to buy it or to break it up.

But recently it seemed to be building up some positive momentum under its new chief executive, Fernando Fernández.

Its share price hit an all-time high on 13 February, just hours before the bombs started falling on Iran. Since then, the shares have tumbled by 18% (more than the overall FTSE index did).

Unilever’s troubles date back to 2017, when its giant US rival, Kraft Heinz, launched an unsolicited £115bn takeover bid. This was quickly seen off by the then chief executive, Paul Polman, who pointed to his success in returning the firm to its corporate-responsibility roots and promised a new round of restructuring, a raised dividend and €5bn in share buybacks.

Last week, it emerged that Kraft Heinz had recently renewed its interest in buying the Anglo-Dutch firm, or at least that they were in talks about merging the two firms’ food divisions – marrying the iconic Heinz ketchup with Unilever’s Hellmann’s mayonnaise.

Investors like the idea of turning Unilever from a sprawling consumer conglomerate into something more focused, particularly on the fast-growing beauty products segment.

Activist shareholder Nelson Peltz has long been agitating for the sale of Unilever’s food division, including as a non-executive board member since 2022. Last year’s spin-out of Unilever’s ice-cream business into the standalone Magnum Ice Cream Company (which also includes Wall’s and Ben & Jerry’s) was well received.

The Kraft Heinz talks reportedly ended before 11 February, when the US firm’s new chief executive, Steve Cahillane, abandoned plans to break up his firm and focus on organic growth.

Now Unilever is reportedly trying to sell its food arm to a smaller rival, spice and sauce maker McCormick.

But what will happen if that deal can’t be done? Unilever seems determined to find a buyer, so it won’t be long before Hellmann’s, plus Marmite, Knorr and other well-known British food brands get a new corporate home.

Photography by Chris Ratcliffe/Bloomberg via Getty Images