Consumer products giant Unilever Plc (UL) is focused on shaping its portfolio to deliver sustainable growth and thereby concentrate on its core portfolio. Unilever's core businesses comprise detergents, foods, toiletries, and specialty chemicals. In order to do so, it recently agreed to sell its meat snacks business to Berlin-based Jack Link’s Meat Snacks for an undisclosed amount.
Per the deal, Unilever will sell its Bifi and Peperami brands to Jack Link’s. Unilever’s Bifi brands have a presence in Germany, Benelux, Austria and Switzerland, while Peperami has established its footprint in the UK and Ireland. The sale would also include the manufacturing unit in Ansbach, Germany.
Of late, Unilever has been divesting its non-core businesses to focus its resources on the core food portfolio. On Jan 6, 2014, Unilever agreed to sell its Royal pasta brand to RFM Corporation, one of the biggest diversified food and beverage companies in the Philippines.
In Dec 2013, Unilever sold its Soft & Beautiful, TCB and Pro-Line Comb-Thru brands in the hair care category to an international hair care company – Strength of Nature for an undisclosed amount. The sale however excludes TCB’s business in Africa.
In early Oct 2013, Unilever sold its Wish-Bone salad dressing business to food company Pinnacle Foods Inc. (PF) for $575 million, while in Jan 2013 the company sold its Skippy peanut butter business to Austin, Minn.-based producer of branded food and meat, Hormel Foods Corp. (HRL) for $700 million in cash. Last year, in August, ConAgra Foods Inc. (CAG) bought its Bertolli and P.F. Chang's frozen meals brands for $265 million.
One more reason for the divestitures may include saturated markets in the developed countries, as the macroeconomic climate is not conducive. As a result, business in these markets has been sluggish and volumes disappointing. Therefore, the company is making a strategic move to optimize its resources and allocate them to more promising markets. Unilever currently holds a Zacks Rank #2 (Buy).
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