Unilever McCormick merger: overviewUnilever faces backlash over $40bn McCormick megamerger from investors, employees, analystsCEO Fernando Fern\u00e1ndez publicly defends deal amid change fatigue concernsShare price falls, major investor exits, staff criticise handlingAnalysts say Foods division valuation uplift unlikely, following separationOutcome signals whether portfolio cuts drive agility or erode profits industrywide<\/p>\n
Unilever\u2019s attempts to silence opposition to its $40bn megamerger with McCormick & Company<\/a> continue to fall short and the strain is starting to show. <\/p>\n Earlier this week, CEO Fernando Fern\u00e1ndez was forced to emphatically defend the deal during the annual dbAccess Global Consumer Conference in Paris.<\/p>\n \u201cSome people say, are you under the risk of change fatigue?\u201d he said in reference to the major structural shift. \u201cI\u2019m not paid to be lazy and our people is not paid to be lazy. So we will do whatever has to be done to ensure we make Unilever a consistent outperformer for the years to come. I believe we have proven that in the last three years, and we will continue proving it.\u201d<\/p>\n Fern\u00e1ndez\u2019s comments follow weeks of backlash to the proposed plans, including the British manufacturing giant\u2019s share price plunging,<\/a> an exit of one of its biggest investors<\/a>, and its own employees publicly stating they\u2019re unhappy with the move<\/a> and the way it\u2019s been handled.<\/p>\n He went on to say that \u201cneither the board nor the leadership team was prepared to kick the can down the road or leave the issues to be sorted out later.\u201d<\/p>\n However, this still leaves big questions unanswered, as Unilever\u2019s Foods division remains profitable, with Morningstar Europe\u2019s associate equity analyst Svetlana Menshchikova predicting the company will fail to see a significant valuation uplift from the separation, as the Foods business was \u201cnot a detraction\u201d. <\/p>\n \u201cIt grows more slowly than the remaining home and personal care business, but carries higher operating margins and, we believe, requires less investment to remain competitive,\u201d she explains.<\/p>\n So what \u201cissues\u201d is Fern\u00e1ndez referring to? Slowness perhaps?<\/p>\n \u201cUnilever has been perceived as slow and complex for a very long period of time,\u201d says Fern\u00e1ndez, indicating that streamlining its portfolio will allow for faster and simpler adaptation to market shifts.<\/p>\n He finished by saying that Unilever \u201cdemonstrated\u201d its ability to execute a complex separation when it offloaded its ice cream business and will \u201cprove the same\u201d with Foods.<\/p>\n Unilever\u2019s future<\/p>\n Whether the Foods separation ultimately unlocks value or compounds Unilever\u2019s challenges may take years to judge. <\/p>\n And this is all based on the assumption that the sale goes ahead at all \u2013 a detail that remains under close scrutiny in light of the less than positive reception to its announcement.<\/p>\n What is certain, however, is that Unilever\u2019s moves are being closely monitored. Investors, employees and rivals are all watching to see how the company proceeds. And, if the deal does go ahead, whether streamlining delivers the promised speed and simplicity or whether it simply removes a dependable profit engine in pursuit of growth elsewhere. <\/p>\n For the wider food and beverage industry, the results will help define whether radical portfolio cuts become a blueprint for success or a cautionary tale.<\/p>\n Unilever is yet to respond to request for comment on the ongoing merger plans.<\/p>\n","protected":false},"excerpt":{"rendered":"Unilever McCormick merger: overviewUnilever faces backlash over $40bn McCormick megamerger from investors, employees, analystsCEO Fernando Fern\u00e1ndez publicly defends…\n","protected":false},"author":2,"featured_media":41865,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[20694],"tags":[21097,16484,21098,21099,21100,21101,21102,616,15991,21103,21104,12729,21105,6034,21106,21107,5302,20895,21108,14782,21109,9212,21110,21111,21112,12213,21113,21114,21115],"class_list":["post-55995","post","type-post","status-publish","format-standard","has-post-thumbnail","category-unilever","tag-architectural-column","tag-boris","tag-boris-bikes","tag-building-activity","tag-building-exterior","tag-built-structure","tag-cathedral","tag-city-of-london","tag-complexity","tag-curve","tag-famous-place","tag-headquarters","tag-intricacy","tag-london-england","tag-london-skyline","tag-north-bank","tag-office","tag-office-building","tag-ornate","tag-plc","tag-polarizer","tag-southwark","tag-southwark-bridge","tag-st-pauls-cathedral-london","tag-thames-embankment","tag-unilever","tag-urban-scene","tag-urban-skyline","tag-walking"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116691507822044877","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/55995","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=55995"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/55995\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/41865"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=55995"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=55995"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=55995"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}