Birds Eye under the hammer

Unilever is planning to sell iconic brand Birdseye in a move that is certain to whet the appetites of PE groups such as PAI and Lion Capital.

The intended sale includes the total frozen food portfolio under the well-known Iglo and Birds Eye brands and the intention is to sell the business in whole or in part.

Unilever’s European frozen foods business is reported to generate revenues amounting to €2bn and employs around 3,500 staff, many of which work in processing plants in the UK and Germany.

Patrick Cescau, group chief executive, said: “Deciding to put the majority of our European frozen food business up for sale has been a tough call. It has been a successful business for us over many years; we’ve built some great brands for consumers with memorable advertising and they’ve created real value for our shareholders.”

“However, although we have made great progress in increasing profitability in recent years, growth has been harder to come by. After an exhaustive review, we have decided that the best way for us to create value is by selling the majority of the European frozen food businesses.”

Unilever’s review, which was announced in September 2005, looked at all the possibilities for the business. It concluded that a strategy to grow the businesses would not deliver satisfactory value. The company decided that its frozen food brands could prosper better under other ownership and that divestment was the best option. It also decided that now was a good time to consider divestment as the deal would be likely to lead the expected consolidation in the frozen food sector.

The Italian frozen foods business will continue to operate as part of the Unilever business.

Patrick Cescau said: “It [the Italian food business] has a good track record, has strong leadership positions and is strategically important in a number of ways. It is our biggest single business in Italy and its retention plays an important role in future trade relations in that country. It is also an important source of innovation and technology in the attractive frozen meals segment that is proving so successful in the US.”

Alex Wessendorff