Unilever still has to transform itself. Here are its options | The Business Standard
Skip to main content
  • Epaper
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Wednesday
May 28, 2025

Sign In
Subscribe
  • Epaper
  • Economy
    • Aviation
    • Banking
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
WEDNESDAY, MAY 28, 2025
Unilever still has to transform itself. Here are its options

Bloomberg Special

Andrea Felsted, Bloomberg
24 January, 2022, 02:30 pm
Last modified: 24 January, 2022, 02:31 pm

Related News

  • Unilever Consumer Care sees 38% profit drop in Q1
  • Unilever replaces CEO Schumacher with finance chief in surprise move
  • Unilever's Indonesia headache worsens with boycott as local brands seize the day
  • Refill machine saves 30% cost, reduces plastic use: Unilever Bangladesh 
  • Ben & Jerry's says parent Unilever silenced it over Gaza stance

Unilever still has to transform itself. Here are its options

The CEO must convince investors that Unilever’s future is in consumer health — and that getting there will require more than disposals by degrees and bolt-on acquisitions

Andrea Felsted, Bloomberg
24 January, 2022, 02:30 pm
Last modified: 24 January, 2022, 02:31 pm
If  Unilever's CEO does not take an axe to his empire, someone else, such as an activist investor, may have a go. Photo: Reuters
If Unilever's CEO does not take an axe to his empire, someone else, such as an activist investor, may have a go. Photo: Reuters

Some things just do not last long. On Wednesday, consumer goods giant Unilever Plc walked away from a deal that came to light just over the weekend. It declined to increase its 50 billion-pound ($68.2 billion) proposal to buy GlaxoSmithKline's Plc's consumer health arm.

Citing financial discipline is an elegant way for Chief Executive Officer Alan Jope to extract himself from a situation that alarmed many investors. Unilever lost about 10 billion pounds off its market capitalisation between confirming the approach on Monday and its U-turn.

Although the deal was almost universally unpopular, it had merits: The acquisition would have taken Unilever into the fast-growing business of over-the-counter medicines. GSK's Voltaren pain relievers and Centrum vitamins could have been easily pumped through Unilever's distribution network, particularly in emerging markets. Disposing of food and refreshments at the same time would have rid Jope of more sluggish units.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Now he has to achieve a portfolio revamp alone. Jope has already acknowledged that Unilever's current strategy is not working, and that he would like to shift the company's focus toward consumer healthcare.

 This will be a lot harder without the GSK brands and with its credibility among investors badly damaged.

As for the next options, Jope could look to other targets. Reckitt Benckiser Group Plc, the British producer of health, hygiene and nutrition products, is the obvious alternative. But with a market capitalisation of about 45 billion pounds, assuming a typical 30% takeover premium, Reckitt would cost about 60 billion pounds.

Yet this is the price GSK was mooted to have had in mind, and it was too rich for Unilever.

What is more, Reckitt has already done a good job of extracting value from its brands, including Nurofen, Mucinex and Gaviscon. Unilever arguably had more opportunity with GSK's consumer-health brands, such as Sensodyne toothpaste, which perhaps were constrained within a science-led pharma company.

Colgate-Palmolive Co., Johnson and Johnson's consumer health business and that of Sanofi SA are further options. But given that Unilever's investors baulked at GSK healthcare, it is not clear Jope would have the backing for another big deal.

He could look to make piecemeal acquisitions and disposals, adding businesses in health and beauty and offloading the food units. Think more Hourglass Cosmetics and less Ben and Jerry's. But investors are already concerned about Unilever's slow pace of change, and this approach would do little to alter that.

A better course of action would be to demerge or to sell the food and refreshment business entirely. On a simple sum-of-the-parts basis, Unilever's beauty and home business could be worth around 123 billion euros ($140 billion).

Its food unit on the other hand, which includes Magnum ice cream and Hellmann's mayonnaise, could be worth about 53 billion euros. Even assuming 8-10 billion euros of value is lost from transaction fees and extra costs, the total gained from offloading food would still be ahead of Unilever's current enterprise value of fewer than 140 billion euros. The idea is worth exploring.

Plus, each division would benefit from a greater management focus. That would help to address criticisms, including from fund manager Terry Smith, that Unilever has an operational problem as well as a structural one.

A private equity group may be willing to take the low-growth but cash-generative food business off its hands. That would give Unilever more financial firepower for another opportunity like GSK's consumer health business.

As I have argued before, if Jope does not take an axe to his empire, someone else, such as an activist investor, may have a go.

The CEO must convince investors that Unilever's future is in consumer health — and that getting there will require more than disposals by degrees and bolt-on acquisitions. Otherwise, grinding out growth in a more difficult consumer environment, without much strategic room to maneuver, will not be any fun.  


Andrea Felsted. Illustration: TBS
Andrea Felsted. Illustration: TBS

Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.

Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement.

Analysis / Features / Top News / Panorama

Unilever

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Inflation, exchange rate shocks to intensify fiscal pressure in FY26
    Inflation, exchange rate shocks to intensify fiscal pressure in FY26
  • File photo of jamaat leader ATM Azharul Islam
    ATM Azharul Islam set free after acquittal in war crimes case
  • Google Pay. Photo: Collected
    Google Pay likely coming to Bangladesh soon

MOST VIEWED

  • Selim RF Hussain. Sketch: TBS
    BRAC Bank MD Selim RF Hussain resigns
  • Bangladesh Bank Governor Ahsan H Mansur. TBS Sketch
    Depositors need not worry as govt will take over banks before merger: BB governor
  • Graphics: TBS
    Suspicious banking activities surge by 56% since July: Cenbank
  • Photo: Collected
    DU student assaulted for protesting eve-teasing at Chadni Chowk
  • Illustration: TBS
    Bangladesh sees highest-ever per capita income of $2,820 in FY25, BBS provisional data shows
  • Officials protest inside the Secretariat on Tuesday, 27 May 2025, over a government ordinance amending the Public Service Act, 2018. Photo: Rajib Dhar
    Protest at Secretariat suspended as govt assures decision on ordinance tomorrow

Related News

  • Unilever Consumer Care sees 38% profit drop in Q1
  • Unilever replaces CEO Schumacher with finance chief in surprise move
  • Unilever's Indonesia headache worsens with boycott as local brands seize the day
  • Refill machine saves 30% cost, reduces plastic use: Unilever Bangladesh 
  • Ben & Jerry's says parent Unilever silenced it over Gaza stance

Features

In recent years, the Gor-e-Shaheed Eidgah has emerged as a strong contender for the crown of the biggest Eid congregation in the country, having hosted 600,000 worshippers in 2017. Photo: TBS

Gor-e-Shaheed Boro Maath: The heart of Dinajpur

1d | Panorama
The Hili Land Port, officially opened in 1997 but with trade roots stretching back to before Partition, has grown into a cornerstone of bilateral commerce.

Dhaka-Delhi tensions ripple across Hili’s markets and livelihoods

2d | Panorama
Photo: Collected

Desk goals: Affordable ways to elevate your study setup

2d | Brands
Built on a diamond-type frame, the Hornet 2.0 is agile but grounded. PHOTO: Asif Chowdhury

Honda Hornet 2.0: Same spirit, upgraded sting

2d | Wheels

More Videos from TBS

How protecting Dhaka’s rivers and canals from plastic waste

How protecting Dhaka’s rivers and canals from plastic waste

37m | TBS Programs
Jamaat leader ATM Azhar released from prison after 13 years

Jamaat leader ATM Azhar released from prison after 13 years

57m | TBS Today
Trump delays 50% tariffs on EU goods

Trump delays 50% tariffs on EU goods

11h | Others
Eid may be celebrated in Bangladesh on June 7

Eid may be celebrated in Bangladesh on June 7

12h | TBS Today
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net