South Africa: Unilever sells spread business to Remgro

FMCG multinational Unilever has announced that it will acquire Remgro’s interest in Unilever South Africa, exchanging it for the Unilever South Africa spreads business and a cash transaction.

According to Unilever, the company is buying a 25.5% stake from Remgro in Unilever South Africa Holdings (Pty) Ltd in exchange for the Unilever spreads business in Southern Africa and a sum of 4.9 million ZAR ($371 million), which represents a deal value of 11.9 billion ZAR ($900 million).

The deal values the spreads business at 7 billion ZAR ($526 million), representing a multiple of 13.4 times core earnings (EBITDA).

“Through this transaction, Remgro has exchanged its minority stake in Unilever South Africa for full ownership and control of the Unilever Spreads business in South Africa, Botswana, Lesotho, Namibia and Swaziland plus cash”, said Remgro CEO Jannie Durand. “We believe the Unilever Spreads business in these Southern Africa countries is an attractive business, with leading brands which include Rama, Stork, Flora and Rondo with good growth prospects”.

Earlier this year, after rejecting a $143 billion takeover offer from Kraft-Heinz Co., Unilever announced its intention to take measures to raise shareholder returns, which included selling its spreads business.

Source: Unilever / Fox Business