The Anglo-Dutch consumer products group Unilever is selling most of its European frozen-foods unit to London-based private equity group Permira. The price for the business, including the Birds Eye and Iglo brands, is 1.73 billion euros. It expects to post an after-tax profit of more than one billion euros from the sale. Unilever has sold because it wants to focus on more profitable brands. The company’s frozen foods business has been underperforming for years with sales down 4.5% last year.
This deal involves Unilever’s operations in Austria, Belgium, Britain, France, Germany, Ireland, the Netherlands and Portugal, but not Italy. The Spanish unit was sold two months ago. It does not include Unilever’s ice-cream business, including Ben & Jerry’s. Analysts said the selling price was at the high end of expectations and the question now is what will the company do with the proceeds?
Some advised that it should return money to investors with a share buyback rather than using it for further acquisitions.