Shares in consumer goods giant Unilever (UL) were lower today despite hopes that buyers could be on the menu for its €3 billion food division.
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It was reported yesterday that the group is in the early stages of considering a separation of its food assets and is speaking with advisers as it studies future options.
Ice Cream Demerger
The move would come in the wake of the demerger of the Magnum Ice Cream Company (MICC) from Unilever back in December. The unit, which includes brands such as Magnum, Ben & Jerry’s and Wall’s, started trading in Amsterdam, its main listing, London and New York.
The split was part of Unilever’s efforts to streamline its product offering to help it boost productivity and growth. It wants to move further toward beauty and personal care, with less of a focus on food and brands such as Marmite, Bovril and Hellmann’s Mayonnaise.
This is despite its food arm notching up a 2.5% increase in full-year underlying sales for 2025, with revenues of €12.9 billion. Indeed, it accounted for a quarter of overall group revenue. Emerging markets were the main driver, with developed markets recording flat growth.
Underlying operating profit for the division was €2.9 billion, up 2.7% versus the prior year.
On the Chopping Block
“Love it or hate it – Unilever shareholders might be called to vote on the future of Marmite and other food brands. Unilever’s food division could be on the chopping block amid rumours the parent might spin off the business,” said Dan Coatsworth, head of markets at AJ Bell. “The consumer goods giant is midway through a process of slimming down to have a sharper focus on what it does best. There is a clear focus on beauty, personal care and wellbeing, meaning food interests no longer sit comfortably on the menu.”
He said that a spin-off could get a warm reception from the market. But a sale of these assets could not be ruled out with trade buyers or private equity as potential owners.
“Someone taking a long-term view might see Unilever’s food business as a portfolio of cash-generative brands that could yield tidy returns,” he said.
Is UL a Good Stock to Buy Now?
Given the lack of analyst coverage on Unilever, let’s look at how its share price has performed over the last 3 months. As can be seen below, it is up just 0.34%.
