Apr 6, 2017

Unilever restructures after failed Kraft bid

Unilever has unveiled a raft of measures to shore up investor support after the multinational's rejection of a $143bn takeover approach from Kraft Heinz. The company also said it would accelerate the pace of cost-cutting already under way in a three-year programme, by doubling the savings target to €2bn. The FTSE 100 company has been under pressure to boost profitability and speed up the pace of growth, after managing to rebuff the bid approach from Kraft Heinz, backed by 3G Capital and Warren Buffett, which quickly dropped the bid in the face of Unilever's opposition. In a radical departure for the conservative company - but one that had been expected - Unilever said it would gear up its balance sheet and targeted a ratio of 2 times net debt to earnings before interest, tax, depreciation, and amortisation. Unilever's strong balance sheet had made it vulnerable to Kraft Heinz, which had intended to use it to help finance its takeover. Paul Polman, chief executive said that although the Kraft Heinz bid had been "Short-lived and opportunistic, it did raise expectations".

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