Breathe a sigh of relief. It seems that Unilever, the British-Dutch consumer goods giant, has successfully spurned the lecherous advances of Kraft Heinz, which had hoped to ink the second-largest M&A deal in history.
The proposed £112bn bid for Unilever would have set back the sustainable business agenda by decades. Paul Polman’s Unilever has made a great virtue out of trying to do the right thing, winning many plaudits for its Sustainable Living Plan which gamely tries to square the profit motive with the principles of doing business in a way that limits the amount of raw materials and energy consumed. It’s a big reason why the Marmite to Pot Noodle giant is the best long-term performer ever in our annual Britain’s Most Admired Companies survey.
The approach had a horrible whiff of the hostile takeover of Cadbury’s by Kraft back in 2010, a deal widely denounced at the time and which was characterised by broken promises and a total disregard for the history and provenance of Cadbury’s name and products here. Just ask the workers who used to make Cadbury’s Dairy Milk in the UK whose jobs have now been ‘outsourced’ to Poland. And although Kraft Heinz is not quite the same company (it was spun out of what is now called Mondelez before merging with Heinz in 2015) it is only one branch on the family tree away.
If anything MT wonders why any takeover should not have been the other way around. Kraft/Heinz appears smaller on the global stage in every way except capitalisation. Kraft/Heinz is an unattractive melange of old school brands and heavily processed foods. Complan and Maxwell House, anyone? It is way off the pace expected by 21st century millennials when choosing what they consume. Neither is Kraft anywhere in the modern world of sustainability.
Unilever may have dodged a bullet, but don’t expect this to be last great British business to be propositioned in the coming months. With the pound still waning post-referendum and the government keen to curry favour with governments in North America and Asia, it won’t be surprising to see more big international acquisitions soon.
That’s not always a bad thing, of course. Jaguar Land Rover has thrived under the ownership of India’s Tata. This year’s Most Admired Company ARM insists it will too under the wings of Japan’s SoftBank (look out for MT’s interview with the chip maker’s boss Simon Segars in Issue 2 of this year). But for every one of those there’s a Cadbury or an MG Rover at risk of being debased or torn to bits.
Image credit: Victor Grigas/Wikipedia