Unilever Share Price Fell After Selling Elida Beauty to Yellow Wood

The Unilever plc (LON: ULVR) share price fell 0.76% after the company decided to sell its Elida Beauty business division to Yellow Wood Partners. The consumer goods giant announced the decision earlier today, given that the division is a non-core business unit. 

While the deal's financial terms were not disclosed, the transaction is expected to be finalised in mid-2024. Elida Beauty boasts a diverse portfolio of over 20 well-known beauty and personal care brands, including household names like Q-Tips, Brut, Caress, Timotei, and Tigi. 

In 2022, the division recorded approximately £800 million ($1.02 billion) in revenues. Unilever's decision to divest Elida Beauty marks the culmination of a process that began in 2021 but was temporarily halted later that year. 

The pause came as offers from other consumer companies cherry-picked some of the brands for sale, which did not align with Unilever's valuation expectations. However, the company, renowned for products such as Dove soap and Ben & Jerry's ice cream, decided to recommence the sale process in September.

Following a competitive auction, Yellow Wood Partners emerged as the successful bidder for Elida Beauty, with negotiations being finalised in recent weeks, as reported by Reuters. This strategic acquisition underscores Yellow Wood's interest in expanding its portfolio within the consumer goods industry.

The consumer goods sector has been grappling with rising costs for nearly two years, with expenses increasing across various fronts, including raw materials like sunflower oil and grains and packaging and shipping expenses. 

These challenges have prompted Unilever, under the leadership of CEO Hein Schumacher since July, to focus its efforts on a core group of 30 key brands that constitute 70% of the company's sales. This move is part of Unilever's broader strategy to streamline its operations and optimize its portfolio.

Notably, this transaction marks the second instance within a year of Yellow Wood Partners acquiring non-core brands from Unilever. In May, Yellow Wood successfully acquired Unilever's personal care brand Suave. 

Unilever share price. 

The  Unilever share price fell 0.76% to trade at 3725.8p from Friday’s closing price of 3754.5p.