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The latest move in Unilever plc's corporate rejiggering came Feb. 4, when the foods group unveiled plans to buy Russia's top ice cream manufacturer Inmarko for undisclosed terms to both bolster its position in Russia and in ice cream overall.
The target has annual sales of nearly $170 million, a strong presence in Eastern and Central Russia and is booming in Kazakhstan, writes The Deal's Jonathan Braude. The deal follows a move in November that advanced the sell-off of London-based Unilever's nonstrategic brands. The company in November 2007 said it would sell its Lawry's and Adolph's brands of marinades and spices to McCormick & Co. The news came two weeks after Unilever on Nov. 5 said it would sell its Boursin cheese brand to Paris-based Fromageries Bel SA for 400 million euros ($593 million). CORPORATE MAKEOVER Meanwhile, a day after Cadbury Schweppes plc said it would separate its North American beverage unit from its candy business, buzz surfaced March 16, 2007, that Unilever might also split in two, or even draw a private equity offer for the whole company. And then the debt markets soured, throwing a wrench into Cadbury's auction, forcing the food and beverage company to consider spinning off, rather than pursuing an outright sale for, the U.S. drinks business, it said Aug. 1. The next day, Unilever unveiled plans to sell assets that collectively account for nearly 2 billion euro in sales, beginning with its U.S. laundry line, which includes detergent brands Wisk and All as well as fabric softener Snuggle, brands that do $1.1 billion in business, alongside plans to cut 20,000 jobs, closing up to 60 factories. Consumer products peer Procter & Gamble Co., too, unveiled plans for divestitures, on Aug. 3, 2007. Some possible divestitures cited in a July study from Lehman Brothers Inc.'s Lauren Liberman and tax expert Robert Willens included Duracell batteries, Braun appliances, Pringles potato chips, and Folgers and Millstone coffee.But what will the fate of each be, The Deal's Lisa Gewirtz-Ward asked in August, especially given debt market concerns?
As of the beginning of February 2008, P&G had been quiet on the M&A front. SWEETEST OFFER Unilever is in the midst of an ongoing transformation, and the company has spent years churning its portfolio. When he took over as chairman in May 2007, it was thought Michael Treschow would likely accelerate the pace for the company, still struggling after pruning its portfolio from 900 brands in 2001 to about 400 in the beginning of the year, and trailing P&G in sales growth. The company has spent years streamlining to bring it under central management, as CEO Patrick Cescau sought to simplify operations.
For more on food companies' restructuring, see related Dealwatches. --Carolyn Murphy
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