Unilever on Tuesday announced the appointment of Nelson Peltz to its board as it engaged in talks about strategy with the billionaire American activist investor.
Peltz is chief executive and a founding partner of Trian Fund Management, an investment management firm that now holds a roughly 1.5 per cent stake in the consumer goods giant. The appointment is expected to take effect on 20 July.
He has previously served on the boards of several major global consumer goods companies, including Procter & Gamble Company, H.J. Heinz Company and Mondelēz International.
“We believe it is a company with significant potential, through leveraging its portfolio of strong consumer brands and its geographical footprint,” Peltz said.
“Trian has made a considerable investment in Unilever. We look forward to working collaboratively with management and the board to help drive Unilever’s strategy, operations, sustainability, and shareholder value for the benefit of all stakeholders.”
Nils Andersen, Chair of Unilever, added: “We have held extensive and constructive discussions with him and the Trian team and believe that Nelson’s experience in the global consumer goods industry will be of value to Unilever as we continue to drive the performance of our business.
“We look forward to working closely together to create long term sustainable value for our shareholders and wider stakeholders.”
According to a Reuters report, Peltz might soon bring the playbook that worked at Cincinnati-based P&G to Unilever’s London-based chief executive Alan Jope.
“It is not that Nelson Peltz has a deep grounding in soap, but he knows his way around complex companies,” the report quoted a Trian advisor as saying. “His team can work backwards from an income statement to understand what levers need to be pulled to make a company better.”
https://www.asiantrader.biz/activist-investor-expected-to-revive-pg-playbook-with-unilever/
At P&G, Trian criticised aging brands, a “suffocating bureaucracy,” short term thinking and sluggish shareholder returns. Many of the same problems exist at Unilever, where the share price has been roughly flat for years.
Earlier in January, Unilever shares rose 6 per cent on reports of Peltz, who often presents himself as a partner with constructive advice for companies, having acquired a stake.
Unilever has already taken some steps to cut costs by consolidating its headquarters in London and getting rid of some slower growing businesses like its Lipton tea brand. Thew business, which employs about 149,000 people worldwide, has also cut about 1,500 management jobs in a restructuring to create five product-focused divisions – a revamp that echoes P&G’s reshaping three years ago.
But analysts said there is more work ahead at Unilever, such as winning in the digital marketplace and solving for an insular culture in which many top executives, including the CEO, have worked for decades.
The half dozen people who have known how Trian operates said the firm has shaped itself into an operational activist that sticks around for many years to see the job through. It has previously taken stakes in Mondelez and Pepsico as well as General Electric, where it has been an investor since 2015.
