Unilever, which rebuffed a $143 billion takeover proposal from Kraft Heinz Co. earlier this year, is betting that condiments can help re-energize its business.
The household-product giant, whose portfolio includes Hellmann’s mayonnaise and Ben & Jerry’s ice cream, has agreed to buy Sir Kensington’s, an upstart food company that makes natural and non-GMO ketchup and eggless mayo, according to people familiar with the matter. The price is about $140 million, one of the people said.
Unilever, which has dual-headquarters in London and Rotterdam, declined to comment.
The company has acquired other young brands in the past, aiming to freshen its image and move into faster-growing markets. Last year, it bought Seventh Generation Inc., a Vermont-based maker of natural and eco-conscious cleaning products. The deal was announced about two months after Unilever acquired Dollar Shave Club, a subscription toiletry-delivery business that’s popular with millennials.
Unilever Chief Executive Officer Paul Polman announced an overhaul of the company this month, following the rejected acquisition attempt by Kraft Heinz. As part of the shake-up, Unilever is putting its margarine business up for sale and trying to boost shareholder returns via buybacks and higher profitability goals. Polman acknowledged he was caught off guard by the approach from Kraft Heinz, which is controlled by the private equity firm 3G Capital and Warren Buffett’s Berkshire Hathaway Inc.
Unilever is struggling with a broader slowdown that has weighed on food and consumer-product giants on both sides of the Atlantic. In a bid to drum up $3 billion in sales over the next 10 years, the company is expanding distribution of its products in major cities, including in Sir Kensington’s hometown of New York.
Sir Kensington’s sells its products in Whole Foods Market Inc. locations and other retailers, and has found a following among consumers who favor new brands with more natural ingredients. For Unilever, the acquisition means the company now owns a rival to Hampton Creek, the eggless mayo company that Unilever sued over the labeling of its Just Mayo product.
Unilever shares rose Thursday in Amsterdam after the company posted quarterly sales that beat estimates. But its personal-care unit fueled most of the growth, not Unilever’s food division. The company has been hampered by lower consumer prices in Europe and a slowdown in emerging markets such as China and India.