Unilever, a brand behind such items as Dove soap, Hellmann’s mayonnaise, and Vaseline, is making a major change in New York City.
Unilever (UL) announced Monday that Nelson Peltz, one of the most influential corporate raiders on Wall Street, will join the company’s board of directors. Peltz’s private investment fund owns a 1.5% stake in Unilever and is known for pushing under-performing companies to restructure, spin-off businesses and even break up. In the past, Peltz has helped force changes at food and consumer giants such as Procter & Gamble (PG), Mondelez (MDLZ) and Wendy’s (WEN).
Peltz’s plans for Unilever are not yet clear, as the company has lagged behind its competitors in recent years and made three failed bids to acquire GlaxoSmithKline’s consumer health care business. In January, Unilever said it was cutting 1,500 management jobs around the world and simplifying its business structure. Some analysts have called for Unilever to split its food and drink brands from its home and personal care division.
Wall Street is betting that Nelson Peltz will help transform Unilever. Shares rose 8% during early trading Tuesday, following news that he would join the company’s board.Analysts say the company needs a major revamp. “Unilever has a double problem,” said AllianceBernstein analyst Bruno Monteyne. “It is facing structural low-growth categories and investors have lost confidence in the board and management.”
Investors expect Nelson Peltz, who has acquired a substantial stake in Unilever, to bring the company “back to basics” by focusing on investments in innovation, adjusting executive compensation incentives and accelerating the pace of acquisitions and sales. Unilever has been on Peltz’s radar for months: In January, The Financial Times reported that he had acquired a stake in the company. On Monday, Unilever Chair Nils Anderson said in a statement that the company has held “extensive and constructive discussions” with Peltz.
