Unilever tea business 'highly likely' to be split off via listing

Unilever is "highly likely" to separately list its tea business on a stock exchange, but does not rule out an outright sale, the group's chief executive said on Thursday.

Last year, the maker of PG Tips and Lipton tea embarked on a review of its 3 billion euros a year global tea division, saying it was looking at options including a spinoff and partial or full sale, without setting a timeframe.

CEO Alan Jope said Unilever had started separating offices, manufacturing lines and people within its tea business, a process it expects to conclude by the end of this year.

The company will make a final decision at the end of that process, but expects to tap capital markets to split off the division, he added.

"You could easily see the Unilever Tea Co becoming a standalone business on a listed stock exchange with its own IPO, that is a highly likely outcome, which would have been very difficult under our old structure," Jope said in an interview with Bloomberg.

In November, the company ditched its Anglo-Dutch dual-headed structure in favour of a single corporate entity based in London, mainly to pave the way to make bigger acquisitions and reshape its portfolio.

Jope added, though, that Unilever was open to talks with private-equity companies that may be interested in buying the tea business.

Jope, who took over the reins in 2019, also dismissed talk of the company looking to sell its Hellmann's business, which had previously come under scrutiny for not adhering to his "brands with purpose" strategy.

Unilever reported slightly lower than expected full-year results on Thursday and restored its pre-pandemic sales growth target, which underwhelmed investors seeking more ambitious goals. It's shares were down 4% in noon trading.

Jope also laid out plans to return Unilever to faster growth, which included focusing on three big markets and making investments in high growth areas such as plant-based foods.

He told journalists the company was looking to make plant-based food deals in China, India and United States, its fastest growing markets.