Unilever has unveiled the result of the strategic review it promised after rebuffing Kraft-Heinz's £115bn takeover bid earlier in the year. The consumer goods giant is to sell its margarine and spreads business, raise its dividend by 12% and cut costs with the aim of achieving a profit margin of 20% by 2020. It will also increase debt, adding another €10bn on top of its existing €12bn, buy back €5bn of shares and review its unusual Anglo-Dutch dual-listed corporate structure.
"The restructuring strikes the right balance," says Nils Pratley in The Guardian. "It stops short of unnecessary drama such as a full demerger of the food division from personal care." The new Unilever will be "recognisably like" the old Unilever.
Still, as a reaction to a hostile takeover, it sets a "rather uncomfortable" precedent, says Bloomberg Gadfly's Chris Bryant. Chief executive Paul Polman knocked back the Kraft Heinz bid "in part because he's no fan of financial engineering". So it would be a "shame" if other companies reached the conclusion that "to remain independent they need to indulge in some financial engineering of their own".
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Quite, says the Financial Times. The notion that these steps represent "the only options for big companies that have fallen into productivity slumps" is wrong. "A headline-grabbing acquisition target that gavea full-throated rejection of this dogma would be a gust of much-needed fresh air."
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Had the Co-op Group "not diversified into banking in 1872, but stuck to burying people and digging up crops, it would have reported a pre-tax profit of £59m" last week, says Matthew Vincent in the Financial Times. Instead, it had to book a £132m pre-tax loss after writing down the value of its stake in the Co-op Bank to zero. After "years of scandal" including a £1.5bn "accounting black hole" caused by its takeover of Britannia Building Society in 2009 and "a crystal-meth buying clergyman chairman" the "worthless bank" is up for sale. If anybody will take it, that is. "Not even the Spanish, normally willing buyers of Britain's duff lenders, are interested."
Footage of a bloodied passenger being dragged off a United Airlines flight won't win the company any customer-service awards, says Charley Grant in The Wall Street Journal. "But it hasn't won many anyway, and that hasn't stopped its shares from soaring." They have nearly doubled since last summer and have tripled in five years. Booting passengers off to make room for crew so United didn't cancel flights the next day "is good for business, if not for customers".
