A business that really takes acquisitions and disposals seriously

The investor presentations section of most quoted company websites is usually the best source of information for teachers and students looking to get a more detailed understanding of a company’s strategy and activities. Unilever plc is no different - and there are some terrific presentations from 2009 and 2008 which are a rich source of insight for students wanting to use Unilever as their research topic for AQA BUSS4. I came across this fascinating graphic in this presentation, which illustrates just how active some businesses are in their acquisition and disposal of businesses and brands.

To appreciate the graphic, you need to remember that Unilever is a global giant in branded consumer products. Think about the vast number of grocery brands that you encounter during a typical visit to Tesco or Asda and you can quickly realise just how many products and brands a business like Unilever, Procter & Gamble, Nestle and others have in their product portfolios.

The key learning point for students is that multinationals like Unilever actively manage their product and brand portfolios. They do this using M&A - mergers and acquisitions, where the company buys and sells brands (or businesses with their own brand portfolios).

And that M&A is incredibly busy in the markets in which Unilever competes. Which brings me back to that graphic I spotted in a presentation given in November 2009 to Unilever’s global investors. Here it is:

The graphic compares Unilever’s global brand portfolio now with what the group had back in 1995. Over a 15 year period, there have been some dramatic changes:

- 40% of the sales Unilever had in 1995 is not with the business in 2009 (€17.5bn)
- 40% of sales in 2009 are from brands acquired since 1995 (€16bn)

There are some familiar brand names in the right hand section. Unilever has acquired brands such as Knorr, Hellmann’s, ben & Jerry’s and Colmans. More recently it bought the personal care division of US conglomerate Sara Lee, which added brands such as Radox and Sanex to its portfolio.

There have also been many brands passing through the Unilever departure gate, such as OXO, Birds Eye and Calvin Klein.

But just look at those totals at the top of the graphic. Unilever has made 210 disposals during the last 15 years and made 250+ acquisitions. By any measure that makes Unilever one of the most active manager of a brand portfolio.