Unilever appoints activist shareholder, raising speculation over ice cream unit

Billionaire Nelson Peltz, whose fund management company has taken a 1.5% stake in the company, will join the  board in July

Magnum ice cream, one of Unilever's brands. Picture: Dan Linehan

Unilever has appointed Nelson Peltz as a non-executive director, driving expectations the activist investor will shake up the slow-growing consumer-goods giant.

Mr Peltz will join the board in July and become a member of the compensation committee, Unilever said. His Trian Fund Management has taken a 1.5% stake in the company, which makes everything from Magnum ice cream to Dove Soap.

The appointment looks set to heighten pressure on chairman Nils Andersen and chief executive Alan Jope to boost returns after a failed effort to buy the consumer division of GSK infuriated some shareholders. 

A decision to also separate its foods and refreshments business into two separate entities will bring more transparency to the performance of its ice-cream operations, which include brands such as Ben & Jerry’s, Klondike and Magnum. That has led to speculation among analysts the ice cream unit could be put up for sale.

Billionaire Mr Peltz turned his attention to Unilever after retiring from Procter & Gamble's board last August. His nearly four-year campaign there brought several dramatic changes aimed at improving returns.

Unilever is a company with significant potential as it has a portfolio of strong consumer brands and a wide geographical footprint, Mr Peltz said.

“Unilever has a double problem: structurally low growth categories, and a loss of investor confidence regarding management and the board,” Sanford C Bernstein analysts led by Bruno Monteyne wrote in a note. 

Mr Peltz’s appointment gives the company “a huge amount of credibility”. Unilever shares rose as much as 7.7% in early trading, before erasing those gains. 

Unilever had already started making changes to speed decision-making and improve accountability. In January, Mr Jope announced plans to cut 15% of its senior managerial positions and made ice cream, beauty and personal care independent units.

Mr Jope is seeking to reorganise the foods business around healthier habits, aiming to build a portfolio of plant-based meat and dairy alternative brands that will generate €1bn worth of revenue by 2025. 

He also has expanded in the fast-growing vitamins, minerals and supplements space with the acquisition of Olly Nutrition in 2019.

The addition to Unilever’s board of Mr Peltz  could drive faster and sizeable portfolio changes after the failed £50bn bid for GlaxoSmithKline’s consumer healthcare unit uncovered large holes, Bloomberg Intelligence analysts said. Disposals have been slow. 

• Bloomberg