Unilever is preparing to pursue more “science-led” health and wellness deals after the sale of its food business.
The FTSE 100 consumer goods giant said it was on the hunt for new acquisitions for its €12.8 billion beauty and wellbeing arm, which has been assembled through a string of deals and is emerging as a key growth engine for the group.
Jostein Solheim, chief executive of the division, said Unilever was “always evaluating what opportunities there are for others to join this collective of companies”.
Targets are likely to be science-based brands, including a mix of earlier-stage companies with scalability and more established players with proven demand, Solheim said. He declined to comment on specific brands but said the focus was on “quality over quantity”.
“Critical for us is science,” he said, adding that Unilever is looking for businesses that can demonstrate clinical backing. “If I’m looking ahead, I think the hydration category is still a massively untapped space.”
The health and wellbeing division has been built through a series of acquisitions since 2018 and now spans seven brands, including Liquid IV, Nutrafol and Olly.
“We’ve had a very successful [mergers and acquisitions] strategy in this space,” Solheim said. “But more importantly, the companies that we acquired have actually accelerated their growth post-acquisition.”
Solheim pointed to Liquid IV, the electrolyte and hydration brand, which has grown sevenfold since being bought by Unilever and has just launched a sugar-free option, as well as continued momentum at Nutrafol.
He said the company’s strategy of allowing brands to retain their entrepreneurial focus while tapping into Unilever’s scale had driven strong organic growth.
The strategy underlines the push by Fernando Fernández, Unilever chief executive, to streamline the group after its exit from food and concentrate investment on higher-growth, science-led categories, with wellness positioned as a key driver of future expansion.
When asked what the culture and leadership was like at Unilever, Solheim said that Fernández, who has been described as a “human tornado”, was the “right man for the right time”.
He added: “There is a sense that we are bringing real focus and clarity to our business and that’s Fernando’s great gift.”
Unilever’s plan to merge its food division with McCormick, the US-based spice and seasoning maker, has had a mixed reaction due to concerns over leverage and execution risks.
The landmark deal, which is not expected to complete until mid-2027, will combine Unilever’s food arm, including Marmite and Hellmann’s mayonnaise, with the US owner of French’s mustard and Frank’s hot sauces, creating a transatlantic food giant with an estimated enterprise value of about $66 billion.
Shareholders in Unilever will be denied a vote on the transaction following M&A rule changes by the Financial Conduct Authority in 2024. The voting date has not yet been specified.
