Summary
After the last major acquisition of TIGI, the Tony & Guy Salon Products unit, Unilever seems to be making the right acquisition moves and is on the prowl for CPG/FMCG companies again.
Analysis
Unilever under new CEO Paul Polman, seems to be re-energized and on the prowl again.
Unilever is gobbling up large companies and brands, that are conducive to their current distribution channels and additive their global brand strategy.
Personal Care and Household Products (about 55% of sales) seem to be particularly attractive right now, due to their diluted valuations in the aftermath of the global recession.
Food its major category (45% of sales) , is also attractive, but not to the same degree as many major and midsized Food Product manufacturers, are doing quite well in the global recession, due to at home meals and economical fast-food being attractive to economy conscious consumers.
Polman's strategy to root out inefficiencies and implement cost-controls in the large multinational is gaining traction and making believers, out of even the most jaded Unilever old timers.
Management's key goals seem to be laser focussed on sales growth and margin improvements, while controlling organizational bloat, rationalization of brands, plants and head count.
Optimal Pricing will be the key element in retaining consumers as P&G has now sadly realized on its major brands like TIDE.
Unilever now globally competes in its various categories against fierce giants, like P&G, General Foods, Kraft, Colgate-Palmolive, Reckitt-Benckiser, L'Oreal, KAO, Henkel and other mid-sized companies.
But the good news is, Unilever seems to be on the prowl and navigating rough waters with a bold new course for the ship with a brave new Captain Paul!
Cyrus Bulsara
GLG - CGS Leader -Top 2%
Cyrus Bulsara consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
