Unilever (NYSE:UL) has completed the sale of its Culver Specialty Brands division to B&G Foods. The sale was announced in October for $325 million in cash. With the sale, Unilever continues the trend of offloading its food businesses to focus on its personal care businesses, much like its largest competitor Procter & Gamble (NYSE:PG) which is selling off Pringles to Diamond Foods (NYSE:DMND) marking the final part of P&G’s exit from the food business.
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Culver Specialty Brands came to Unilever with acquisition of The Alberto Culver Company from Sara Lee in 2010 and include Mrs. Dash salt-free branded seasoning blends, Molly McButter branded flavored sprinkles, Sugar Twin branded sugar substitute, Baker’s Joy branded baking spray and Static Guard branded anti-static spray in the US and Canada. It plans to close the Alberto Culver plant in Melrose Park in 2013.
The company is likely to offload more of its food businesses like savory, dressings and spreads that provide it limited growth prospects to instead divert its resources to expand its fast-growing personal care business, particularly in the emerging markets. The trend is indicated by similar recent developments which we discussed in a recent article – Unilever : Shifting Focus From Food Businesses To Personal Care. In similar trends, its largest competitor P&G is also about to conclude its exit from the food business after selling Pringles to Diamond Foods to shift focus personal care brands.
We value Unilever with a $32 Trefis price estimate of its stock, roughly in line with its current market price.