Unilever Said to Consider Selling Slim-Fast Diet Unit Amid SlumpMatthew Boyle
Unilever, the world’s second-biggest consumer-products maker, is considering a sale of Slim-Fast after years of declining sales at the diet-food business, according to a person with knowledge of the matter.
There’s no indication when a decision will be made, said the person, who declined to be identified as the deliberations are private. Sky News reported today that the maker of Magnum ice cream bars might sell the business for 1 billion pounds ($1.7 billion).
That price is likely too high, said Jon Cox, an analyst at Kepler Cheuvreux. “It’s a business that is structurally challenged.” The unit has annual sales of less than $300 million, according to the person with knowledge of the matter.
Unilever bought Slim-Fast in 2000 for $2.4 billion. The business subsequently lost fans as people trying to lose weight sought success with low-carb diets like South Beach and Atkins. Five years later, Unilever took charges totalling 850 million euros ($1.2 billion) to account for the brand’s reduced value.
Chief Executive Officer Paul Polman said in December that the London- and Rotterdam-based company would continue to sell non-core assets, pledging to do “more in 2014,” and adding that work had already been started on some disposals. Unilever has raised more than $1.3 billion selling brands including Skippy peanut butter in the past year.
A sale of Slim-Fast would follow larger rival Nestle SA’s disposal of diet businesses. The Swiss company agreed in November to sell most of its Jenny Craig unit for an undisclosed amount.