Unilever Nigeria, a consumer goods giant, has announced plans to separate its tea business into a new legal entity in line with the company’s global strategic review.
Unilever, in a release on Thursday, said the planned separation will go through the normal approval process and is “expected to be concluded by the end of 2021.”
In 2020, it embarked on a review of its 3 billion euros a year global tea division, saying it was looking at options including a spinoff and partial or full sale, without setting a timeframe.
Alan Jope, global chief executive officer of Unilever, said the company had started separating offices, manufacturing lines and people within its tea business, a process it expects to conclude by the end of this year.
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The company will make a final decision at the end of that process, but expects to tap capital markets to split off the division, he added.
“You could easily see the Unilever Tea Co becoming a standalone business on a listed stock exchange with its own IPO, that is a highly likely outcome, which would have been very difficult under our old structure.”
He further said that Unilever was open to talks with private-equity companies that may be interested in buying the tea business.
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Unilever Nigeria recorded N34.7 billion in revenue from its food products segment, which consists of tea and savoury, out of the company’s total topline of N61.57 billion in full year 2020.
Shares of Unilever traded at N25.16 Thursday, on the floor of the Nigerian Stock Exchange, and has dropped 4.68 per cent in value this year.
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