Anglo-Dutch consumer products giant Unilever (AEX: UNA) says it will divest its spreads business. The unit, which contains brands including Flora and Stork, could be worth as much as £6 billion, per reports. The company also announced a €5 billion share buyback program for 2017 and the combination of its foods and refreshment businesses.
The announcement follows the strategic review Unilever undertook after the failed takeover approach by Kraft Heinz (NASDAQ: KHC), the Berkshire Hathaway- and 3G Capital-owned American conglomerate.
Unilever isn’t the only European multinational trying to prove it doesn’t need a takeover to drive shareholder value. Dutch paints company AkzoNobel (AEX: AKZA) has rejected offers from PPG Industries (NYSE: PPG), instead proposing to spin off its specialty chemicals business. AkzoNobel will update investors on details of the plan on April 19.
The sale of these two businesses would boost European corporate divestiture numbers, which have declined every quarter since 1Q 2016, per the PitchBook Platform. This fall has also coincided with a sustained drop in the number of completed share buybacks by European companies, another method of assuaging shareholders in the face of hostile bids.
While not every asset sale or buyback is indicative of a defence against a takeover attempt, the decline in the number of these deal types indicates that European companies are not feeling the pressure they once were to artificially boost shareholder value. The outcome of the Unilever and AkzoNobel sagas, however, could soon change this mindset.
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