Unilever to Sell Its Olive Oil Business in Greece

After years of dominance, Unilever is about to withdraw from the Greek olive oil market.

By Costas Vasilopoulos
Dec. 27, 2017 09:07 UTC
266

Elais-Unilever Hellas, the sub­sidiary of the British-Dutch giant Unilever in Greece, is the leader in the stan­dard­ized olive oil mar­ket of the coun­try account­ing for more than 60 per­cent of total sales along with run­ner-up Minerva. But last September, the com­pany offi­cially announced its inten­tion to pull out of the olive oil busi­ness by sell­ing its brands and the pack­ag­ing plant it owns in Faliron, Athens.

In its press release, Elais-Unilever stated that the sell­out of the olive oil sec­tor fol­lowed the inten­tion of the par­ent com­pany Unilever to reassess its strate­gic choices regard­ing its mar­garine and spreads busi­ness world­wide.

Potential buy­ers would acquire the brands Altis, Solon and Elanthi, along with the plant in Faliron and all of its employ­ees. The com­pany also pointed out that despite the sale, it would retain its pro­duc­tion line in Greece by trans­fer­ring more resources to the other plant it keeps in the area of Renti, which makes deter­gents and other house­hold prod­ucts.

Olive oil and mar­garine together rep­re­sent 20 per­cent of the total turnover of the firm in Greece. Elais-Unilever had made a sim­i­lar attempt to move away from the oil busi­ness about ten years ago, but to no avail. Now the seg­re­ga­tion of the olive oil divi­sion seems more than cer­tain when on December 15 the com­pany announced that the American invest­ment and pri­vate equity firm KKR had made a bind­ing offer of €6.8 bil­lion ($8.05 bil­lion) for the mar­garine and spreads of Unilever world­wide (South Africa excluded).

The olive oil brands in Greece and the fac­tory in Faliron were bun­dled together in the forth­com­ing deal, mean­ing that the whole depart­ment of Elais-Unilever olive oil will be trans­ferred to the KKR fund as is. KKR is already active in Greece by pro­vid­ing ser­vices to banks in the bad loans sec­tor and non-per­form­ing expo­sures.

According to ana­lysts, Elais-Unilever aban­doned the sec­tor because it lacked strong brand­ing and did not shift to bot­tled olive oil as expected. The com­pany was mainly focused on the inter­nal mar­ket where bulk oil still accounts for 70 per­cent and the ongo­ing tough eco­nomic con­di­tions are not a good omen for a rad­i­cal change to be expected soon.

The takeover is sched­uled to take place in mid-2018, and up to now, no infor­ma­tion has been released on what KKR plans to do with the olive oil divi­sion of Elais-Unilever.

The head­quar­ters of Elais-Unilever in Athens declined to fur­ther com­ment on the buy­out when reached by Olive Oil Times.





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