Remgro, a leading South African investment company, has announced that its subsidiary is selling its 26% stake in Unilever South Africa Holdings to Unilever for a deal worth R11.9bn (US$894mn) that will include both cash and the complete ownership of Unilever’s South African spreads business.
Robertson’s values Unilever’s spreads business at R7bn ($526mn), leaving a R4.9bn ($368mn) cash sum to be passed over in the transaction.
“While the investment has been a profitable one for Remgro, its inability to shape the strategic direction of the Unilever SA business has led Remgro to conclude that it will create more value through full ownership and control of the spreads business,” Remgro said.
The South African spreads business that Remgro will be acquiring from Unilever, the owner of Dove soap and Ben & Jerry’s ice cream, includes the brands Rama, Stork and Rondo, products that Remgro believes will continue to offer good growth prospects.
This is despite Unilever’s overall spreads business, including brands such as Flora, Becel and Country Crock, having been in decline for years due to consumers cutting back on bread and butter-based products.
The transaction is expected to close some time in the first quarter of 2018.