Unilever’s Sara Lee purchase ‘in conflict with global plan’

£1.16bn ‘local brands’ deal would make no sense for Unilever, says senior analyst.

Brylcreem: One of the Sara Lee brands Unilever intends to purchase
Brylcreem: One of the Sara Lee brands Unilever intends to purchase

Unilever’s surprise decision to purchase the Sara Lee brands is at odds with its global strategy, according to a senior analyst.

Colin Hession, managing director of specialist toiletry and cosmetics consultancy Colin Hession Consulting, says: “Why would Unilever, having only recently got rid of its own long tail of small local brands, want to acquire a whole lot of someone else’s?

“Unilever has been talking about multi-country brands over the past five years, and now suddenly it buys Sara Lee’s ragbag of one-country and two-country brands – exactly of the sort they’ve been getting rid of,” he adds.

Unilever is expected to pay £1.16bn for the Sara Lee brands, which include Radox, Brylcreem and Sanex, subject to approval.

Unilever chairman Dave Lewis says the addition of Sara Lee’s personal care business will allow the consumer goods company to reach different customer segments by enabling it to sell “value and mid-tier products” in the UK and Ireland.

Hession predicts “some of the diverse bundle of brands” could be sold or folded into the Unilever distribution network, but he argues that, overall, the acquisition of Sara Lee’s personal care business simply doesn’t appear to make sense.

Only last year analysts were speculating that Unilever might sell off a number of local brands, such as Marmite, to streamline its portfolio.

Unilever chief executive Paul Polman justifies the Sara Lee purchase, saying: “The brands enjoy strong consumer recognition, offer significant growth potential and are an excellent fit with Unilever’s existing business.”

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