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

Saturday
May 31, 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
SATURDAY, MAY 31, 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

  • Infograph: TBS
    Tax exemptions for key industries to go, sweeping tax hikes planned
  • Chief Adviser Muhammad Yunus meets Japanese Prime Minister Ishiba Shigeru in Japan on 30 May 2025. Photo: CA Office
    Bangladesh, Japan to sign Economic Partnership Agreement by year-end
  • US President Donald Trump walks as workers react at US Steel Corporation–Irvin Works in West Mifflin, Pennsylvania, US, May 30, 2025. Photo: REUTERS/Leah Millis
    Trump says he plans to double steel, aluminum tariffs to 50%

MOST VIEWED

  • BAT Bangladesh has to vacate Mohakhali HQ as SC rejects lease appeal
    BAT Bangladesh has to vacate Mohakhali HQ as SC rejects lease appeal
  • Bangladesh Chief Adviser Muhammad Yunus speaks to Nikkei Asia in Tokyo on 29 May. Photo: Nikkei Asia
    Bangladesh ready to buy more US cotton, oil to reduce trade gap: Yunus
  • Bangladesh targets global trade alignment with sweeping tariff changes
    Bangladesh targets global trade alignment with sweeping tariff changes
  • Matarbari 1,200MW coal-fired plant in Moheshkhali, Cox's Bazar. File Photo: Nupa Alam/TBS
    Supplier slapped with 5 conditions to unload rejected Matarbari coal shipment
  • US Embassy Dhaka. Picture: Courtesy
    Birth tourism not permitted on US visitor visa: US Embassy Dhaka
  • Six banks fail to pay dividends for 2024
    Six banks fail to pay dividends for 2024

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

Babar Ali, Ikramul Hasan Shakil, and Wasfia Nazreen are leading a bold resurgence in Bangladeshi mountaineering, scaling eight-thousanders like Everest, Annapurna I, and K2. Photos: Collected

Back to 8000 metres: How Bangladesh’s mountaineers emerged from a decade-long pause

16h | Panorama
Photos: Courtesy

Behind the looks: Bangladeshi designers shaping celebrity fashion

18h | Mode
Photo collage of the sailors and their catch. Photos: Shahid Sarkar

Between sky and sea: The thrilling life afloat on a fishing ship

22h | Features
For hundreds of small fishermen living near this delicate area, sustainable fishing is a necessity for their survival. Photo: Syed Zakir Hossain

World Ocean Day: Bangladesh’s ‘Silent Island’ provides a fisheries model for the future

1d | The Big Picture

More Videos from TBS

Six Lakh Sacrificial Animals Ready in Sirajganj for Eid-ul-Adha

Six Lakh Sacrificial Animals Ready in Sirajganj for Eid-ul-Adha

12h | TBS Stories
Six MoUs signed during Chief Advisor's visit to Japan

Six MoUs signed during Chief Advisor's visit to Japan

16h | TBS Today
Record migrant deaths in 2024

Record migrant deaths in 2024

1d | Podcast
Govt likely to trim subsidies in new budget

Govt likely to trim subsidies in new budget

19h | TBS Insight
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