Nelson Peltz takes aim at Unilever
LONDON — Just days ago, Unilever suffered a heavy defeat when it was forced to drop its $68 billion bid for GlaxoSmithKline’s consumer healthcare business.
He now has to deal with one of Wall Street’s most prominent activist investors, Nelson Peltz, who acquired a stake in the consumer products giant through his investment firm, Trian Fund Management, two people said on Sunday. informed about it.
It’s unclear how much stake Trian holds or what it claims, although one of the people said the company had started buying shares in Unilever before the GlaxoSmithKline company lawsuit became public. .
Representatives for Unilever and Trian declined to comment on the investment, which was first reported by The Financial Times.
Yet the emergence of Trian, known for pushing change at giants like General Electric, Mondelez and Procter & Gamble, is adding more pressure on Unilever as it seeks a new strategic direction.
Unilever shares plunged last week after it said it was interested in buying Glaxo’s consumer business, despite being rejected three times. After adamant resistance from investors and analysts – one analyst titled his research note on the deal “Please don’t” – over concerns about the price and ability to integrate the company , Unilever said it would not increase its tender offer, effectively walking away.
Unilever said it wanted to focus more on high-growth businesses such as beauty, health and hygiene, and would sell off slower-growing businesses. The company has already taken steps in this direction, including through its deal last year to sell global tea brands like Lipton and Tazo.
And two years ago, it decided to consolidate its vast consumer goods empire in London, abandoning its second headquarters in Amsterdam to simplify its operations.
Even before GlaxoSmithKline’s offer, another of Unilever’s main shareholders, investment company Fundsmith, criticized the company for focusing too much on climate and social causes, and said the company had neglected its core business.
Unilever now faces a potential new threat in Trian, known for writing detailed analyzes of the operations of its shareholder activism targets. (His so-called white paper on GE was 80 pages.)
Trian is known for pushing companies to simplify their corporate structures, often by divesting underperforming companies. At P.&G., for example, Trian argued that the consumer goods giant should cut costs and layers of bureaucracy, but not necessarily that it should sell divisions.
Mr. Peltz eventually won a seat on the P.&G board. in 2017, after doing what was most expensive board fight checked in. He finally resigned last year, the shares of P.&G. having increased significantly since when Trian started calling for changes.