Economy

Remgro acquires Unilever's spreads business in Southern Africa

Unilever and South African investment holding company Remgro on Friday announced a 11.9 billion rand ($901 million) deal that sees Unilever trade its spreads business in southern Africa for Remgro's stake in its South African subsidiary.

The companies said in a joint statement on Friday that Unilever had agreed to purchase Remgro's 25.75% stake for R7bn, for a total transaction representing R11.9bn, or a 13.4 multiple of 2016's earnings before interest, tax, depreciation and amortisation (ebitda).

"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. Luc-Olivier Marquet, Executive Vice President of Unilever SA said: "Unilever South Africa is a great business, well positioned for sustainable long-term growth".

Unilever Southern Africa's spreads business markets and sells various brands, including Rama, Stork, Flora and Ronda. "We thank Unilever for the longstanding relationship and wish Unilever and the employees of Unilever South Africa well for the future".

According to Euromonitor, Unilever's spreads accounted for 6.6% of retail sales in South Africa a year ago, behind local players Foodcorp - owned by RCL Foods - and Tiger Brands, which had market shares of 10.7% and 28.4% respectively. "We welcome the prospect of having the Spreads business as part of the Remgro Group".



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