Two of Unilever’s largest investors have called for major changes at the company, according to a report by the Financial Times (FT).
The news comes in the wake of a failed takeover attempt for GlaxoSmithKline’s consumer health business, which saw Unilever make multiple bids for the division.
Bert Flossbach, founder and chief investment officer at top-ten Unilever shareholder Flossbach von Storch, wants the company to consider splitting itself.
“Unilever should seriously think about splitting the company,” he said, cited by the FT. “Talk of synergies between different businesses is usually theoretical and designed to keep the status quo, and smaller than the efficiency gains that you would get from a split.”
Flossbach continued: “If you’re a food manager, you’re thinking differently from a household products manager or a beauty manager. If you run these businesses under one structure, capital allocation can become a problem. And you’re very diverse in a negative sense because you don’t know precisely what you stand for.”
Flossbach suggests one possibility would be to keep the food business under the Unilever name and spin off other divisions.
Meanwhile, another shareholder has reportedly called for the removal of the company’s chair Nils Andersen, amid concerns that the board he heads allowed CEO Alan Jope to make increasing bids for the GlaxoSmithKline division. The “top-20 shareholder” believes that Andersen’s replacement should come from outside the board.
These calls follow news – reported by the FT – that Nelson Peltz’s activist fund Trian Partners has built a stake in Unilever, and further increase the pressure on the company’s leadership. Trian has yet to detail its demands.
Unilever has also announced a reorganisation that entails axing 1,500 management positions and subdividing the company into five business groups.
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