Unilever trims portfolio with Ragu, Bertolli sale

Unilever trims portfolio with Ragu, Bertolli sale

Japanese condiments maker Mizkan Group has agreed to acquire Unilever's Ragu and Bertolli sauce brands in North America.

Mizkan will pay a cash consideration of US$2.15bn for the brands, which generate an annual turnover of more than $600m. The transaction includes two production facilities.

Panmure Gordon analyst Graham Jones, who covers Unilever, said it is understood the sale will generate post-tax proceeds of EUR1bn (US$1.3bn) for the consumer goods giant.

"Allowing for de-leverage on fixed costs we believe the disposal will be a circa 10 basis point dilution to group EBITA margins on a full-year basis, and modestly EPS dilutive. As such, despite the 2% accretion coming from the 2.4% deep discounted buy-back announced a few days ago, we see no reason to materially change forecasts," he wrote in a note to investors.

Kees Kruythoff, president of Unilever North America, said: "This sale represents one of the final steps in reshaping our portfolio in North America to deliver sustainable growth for Unilever, and enables us to sharpen our focus within our foods business."

The disposal comes as Unilever increases its focus on "fewer, bigger brands" around the world. The company has sold off a number of food assets of late, including its European meat snacks division earlier this year and its US salad dressing business last summer.

Last month, Unilever confirmed it is reviewing its options over its Slim.Fast unit.