The maker of Ben & Jerry’s ice cream, Dove soap, and Hellman’s mayonnaise is hiring investment banks to sell a basket of non-core beauty and personal care brands, including Q Tips and Impulse, reviving an effort it abandoned two years ago. According to people familiar with the matter, Morgan Stanley and Evercore Inc. are gauging interest in the brands, which make up part of the unit called Elida. The revival of the sale process, which has not been previously reported, represents the first significant move by Hein Schumacher, who took over as Unilever’s chief executive in July, focusing on streamlining its business.
The consumer goods company has been grappling with soaring costs for about two years as everything from sunflower oil and shipping to packaging has surged. Those increases have driven up product prices and prompted the company to review what it can sell. The company has also slashed jobs and shook up its management team.
Unilever said on Tuesday that it had hired Morgan Stanley and Evercore to sell a portfolio of products, including Q-Tips, Impulse, Dove Body Wash, Vaseline, Pond’s Cold Cream, and some other cosmetics and toiletries. The move is intended to raise about $1 billion and is part of the company’s effort to free up cash. The company has about $3 billion in net debt and is working to reduce its leverage ratio to below three times earnings, the industry’s standard.
A spokeswoman for Unilever, which has about $70 billion in sales, didn’t immediately respond to a request for comment. The move comes as Unilever continues a massive restructuring and is under pressure from activist investor Nelson Peltz to cut costs, invest more in innovation, and return cash to shareholders.
Hein Schumacher, who takes over as Unilever’s chief executive from Alan Jope on 1 July after a month of handover work alongside him, has vowed to shake up the company and streamline its business. After a lengthy global search process that kicked off last fall, Unilever named him as CEO.
The company has sold some tea assets, cut thousands of jobs, and reorganized around five distinct groups that focus on beauty and wellness, personal care, home care, nutrition, and ice cream. Unilever has also been shifting to more sustainable products.
Hein Schumacher, who oversees the dairy group at the Dutch company Royal FrieslandCampina, will likely continue that shift toward more sustainable products. He has a reputation for being an innovative thinker and is credited with turning around FrieslandCampina, which operates in over 40 countries. His experience navigating a complex, global business in an uncertain economic environment could be helpful as Unilever tries to keep its competitive edge amid volatile markets and rising material costs. This year, Unilever’s shares have underperformed in the consumer staples and food sectors. Its stock rose after it hired Peltz, a turnaround specialist, as a board member. Unilever has warned that it might need to raise more capital this year to meet its goals for cutting greenhouse gas emissions and increasing the proportion of renewable energy in its supply chain by 2025.