Remgro strikes massive R11.9 billion deal with Unilever
Remgro on Friday announced a R11.9 billion deal with Unilever, that sees Unilever exchange its spreads business in southern Africa for Remgro’s 25.75% stake in its South African subsidiary.
Unilever SA manufactures and markets a range of food, home and personal care products. Brands include Ola, Robertsons, Rama, Flora, Lipton, Joko, Shield, Dove, Sunlight and Omo.
Remgro obtained its holding in Unilever SA in 2007 through the merger of certain interests in the food space with those of Unilever.
Unilever said it would acquire Remgro’s 25.75% shareholding in its South African subsidiary in exchange for the spreads business – valued at R7 billion – and cash of R4.9 billion.
“While the investment has been a profitable one for Remgro, its inability to shape the strategic direction of the Unilever SA business has led Remgro to conclude that it will create more value through full ownership and control of the Spreads Business,” it said in a statement.
“The Spreads Business is an attractive business, with leading brands (including Rama, Stork, Flora and Rondo) and good growth prospects,” it said.
The cash proceeds will be used by Remgro for investment and/or capital management purposes, the investment company said.
The transaction, it said, values Unilever SA and the Spreads Business at enterprise values of R48.1 billion and R7 billion, respectively.
The expected closing date of the transaction is in the first quarter of 2018.
Remgro’s current assets include Dark Fibre Africa, and Seacom.
Reuters said that the deal is the first step in Unilever’s exit of its shrinking spreads business, a move it promised earlier this year following an unsolicited $143 billion takeover offer from Kraft-Heinz.
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