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Unilever Confirms Plan to Sell Spreads Business, Raises Cost-Saving Targets

6:48 AM, Apr 6, 2017 — Anglo-Dutch consumer goods company Unilever (UL) said on Thursday that it plans to offload its edible spreads business and review its structure after the US food giant Kraft Heinz abandoned its takeover bid in February.

The company said that it had “the future of the spreads business now lies outside the group,” following a review of its businesses, adding that it plans to sell or separate the unit that makes the Flora and Stork margarine brands.

Unilever is also reviewing its dual corporate structure which currently has headquarters in London and Rotterdam, with a view to simplifying its legal structure and increasing its flexibility for strategic decisions, and it is setting up an integrated foods and refreshment unit, which will be located in the Netherlands.

The company said that the improvements it is making will allow it to increase its underlying operating margin, excluding restructuring, from 16.4% in 2016 to 20% by 2020. It now sees total cumulative savings over the next three years at 6 billion euros ($6.40 billion) rather than the 4 billion euros that it targeted earlier. It expects to incur total restructuring costs for the cost-cutting programs of about 3.5 billion euros for the 2017-2019 period.

As part of a program to return value to shareholders, Unilever said that it would buy back 5 billion euros of shares this year and it said that it intends to raise the dividend by 12% for the coming year.

Companies: Unilever PLC
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