After weeks of canny tactical dithering, the board of US foods group Bestfoods has accepted an improved $24.3 billion (£15.6bn) offer from Unilever and will recommend this to its shareholders.
With combined global sales of around £34bn, the merged operation will be the world’s largest in the foods and consumer goods sector. Among the Bestfoods’ brands joining the Unilever portfolio are Marmite, Knorr soups, Skippy peanut butter and Hellmann's mayonnaise.
Unilever chairman Niall FitzGerald confirmed that the deal will result in job losses resulting from a cost-cutting drive to save $750m annually by 2003. Marketing, sales, and distribution are among the most likely targets for the axe. However, Bestfoods management, which has outperformed Unilever's in global food markets will be encouraged to stay with the company. According to Fitzgerald, they "will play an important role".
Although Unilever may be forced to sell some brands to satisfy US and European regulators, its portfolio in Latin America will be greatly strengthened by Bestfoods. Conversely, the Anglo-Dutch company will improve Bestfoods' exposure in the Asia Pacific region.
News source: The Times (London)