Unilever PLC (ULVR.LN) on Friday said that it is swapping its Southern African spreads business for full control of its South Africa subsidiary in a deal valued at 11.9 billion South African rand ($893 million).
South African investment holding company Remgro Ltd. (REM.JO) will sell back its 25.75% stake of Unilever South Africa (Pty) Ltd. to Unilever, giving the company full control of that business.
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In exchange, Unilever will give Remgro its spreads business in South Africa, Botswana, Lesotho, Namibia and Swaziland--which it says is valued at 7 billion rand--along with a cash sum of 4.9 billion rand.
Earlier this year, Unilever fended off an unwelcome $143 billion acquisition approach from Kraft Heinz Co. (KHC). This prompted Unilever to say it was considering measures aimed at raising shareholder returns, including selling its spreads business. The business has long dragged down sales growth as consumers have bought less bread or increasingly opted for butter over margarine. The Southern Africa spreads business makes up about 5% of Unilever's global spreads unit.
Remgro's stake in Unilever stretches back to 2002, stemming from an investment the South African firm made in spice specialist Robertsons.
"By giving us full ownership of the business, this transaction means we are better placed to accelerate that growth while the spreads business moves on to Remgro where it augments their current portfolio and can be sure of a great future," said Luc-Olivier Marquet, executive vice-president of Unilever South Africa.
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(END) Dow Jones Newswires
September 22, 2017 11:37 ET (15:37 GMT)