Butter late than never: Unilever has finally sold its spreads business

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Butter late than never: Unilever has finally sold its spreads business

Anglo-Dutch consumer goods manufacturer Unilever PLC said late Friday that it will sell its global spreads business to USA buyout fund KKR & Co LP for EUR6.83 billion on a cash and debt free basis.

The operation employs 2,300 people around the world and also owns the brands ProActiv, Becel, Blue Band, Rama and Country Crock.

The move follows a wide-ranging review of its business which was prompted by a takeover attempt by rival Kraft.

Kohlberg Kravis Roberts, or KKR, has won the auction to acquire Unilever's (UN) spread business, the Financial Times reports, citing two sources.

The deal is expected to be completed in the middle of next year, and is subject to regulator approval in certain jurisdictions.

"The announcement marks a further step in reshaping and sharpening our portfolio for long-term growth", he added.

Paul Polman, chief executive of Unilever, said: "After a long history in Unilever, we decided that the future of the spreads business would lie outside the group". "The consideration recognizes the market leading brands and the improved momentum we have achieved". In 2016, the business had a turnover of EUR3.03 billion, adjusted earnings of EUR680 million and assets of EUR1.11 billion.

KKR is buying the brands - which it said had a "firm foundation for future growth" - even though some analysts believe the sector is slowing down as consumers turn away from margarine. Liabeuf will continue to lead the spreads business after the sale.

Unilever shares are up 1.3% today to 4194.5p, but the business did not announce the sale until after markets closed at 4:30pm.

It posted a 2.6% increase in underlying sales for the period to 13.2 billion euro (£11.8 billion), below expectations and down from 3% in the first half of the year. It plans to sell its underperforming spreads business, which could yield up to £6bn.

This year Unilever has snapped up small brands including Tazo tea, Sundial Brands and Carver Korea.

The spreads business attracted interest from some of the biggest names in private equity, including Blackstone, which failed to make it to the second round with it's joint approach with CVC, Clayton Dubilier & Rice and Bain Capital.

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