Unilever to Sell Its Olive Oil Business in Greece

Summary

Elais-Unilever Hellas, the leader in the stan­dard­ized olive oil mar­ket in Greece, is sell­ing its olive oil brands and pack­ag­ing plant in Athens due to its par­ent com­pany Unilever’s strate­gic reassess­ment of its mar­garine and spreads busi­ness world­wide. The American invest­ment firm KKR has made a bind­ing offer to acquire the olive oil divi­sion, which is expected to be final­ized by mid-2018, but plans for the divi­sion’s future have not been dis­closed.

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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