Unilever has agreed to divest its South African spreads business to Remgro as part of a ZAR11.9bn ($900m) worth deal with the investment firm.
Under the terms of the agreement, Unilever will buy Remgro’s 25.75% stake in Unilever South Africa in exchange of the Unilever Spreads business plus cash consideration of ZAR4.9bn ($370m).
Remgro had entered into the Unilever South Africa business in 2007. Unilever South Africa which is valued at ZAR48.1bn ($3.64bn) produces and markets a variety of food, home and personal care products.
Unilever South Africa executive vice president Luc-Olivier Marquet said: “Unilever South Africa is a great business, well positioned for sustainable long-term growth.
“By giving us full ownership of the business, this transaction means we are better placed to accelerate that growth while the Spreads business moves on to Remgro where it augments their current portfolio and can be sure of a great future.”
Remgro stated that although its investment in Unilever South Africa has been profitable, it has not been able to shape the strategic direction of the business.
The investment firm as a result believes that it can create more value by taking 100% ownership and control of the spreads business of Unilever, valued at ZAR7bn ($530m).
Remgro CEO Jannie Durand said: “Through this transaction, Remgro has exchanged its minority stake in Unilever South Africa for full ownership and control of the Unilever Spreads business in South Africa, Botswana, Lesotho, Namibia and Swaziland plus cash.
“We believe the Unilever Spreads business in these Southern Africa countries is an attractive business, with leading brands which include Rama, Stork, Flora and Rondo with good growth prospects.”
Subject to customary regulatory approvals including approval of the South African competition authorities, the transaction is anticipated to be completed in the first quarter of 2018.
