A Corporate Raider is Coming After Hellmann’s and Dove

Unilever, the consumer products behemoth behind Dove soap, Hellmann’s mayonnaise, and Vaseline, may be undergoing a reorganization. Unilever (UL) announced Monday that Nelson Peltz, one of Wall Street’s most powerful corporate raiders, will join the board of directors and that Peltz’s fund owns a 1.5 percent investment in the firm.

Peltz is a well-known activist investor who has pushed companies to restructure, spin-off businesses, and even dissolve them. He has pushed for improvements at companies including Procter & Gamble (PG), Mondelez (MDLZ), and Wendy’s in the past (WEN).

It’s unclear what Peltz has in mind for Unilever, which has fallen behind competitors in recent years and has made three failed offers to buy GlaxoSmithKline’s consumer health care sector.
Unilever announced in January that it would eliminate 1,500 managerial posts globally and revamp its corporate structure.

Unilever’s food and beverage businesses should be separated from its home and personal care sector, according to several experts. Wall Street, on the other hand, believes Peltz can help Unilever transform. During the early trading session on Tuesday, shares of UL gained 8%, only to lose most of that momentum the following day. Analysts believe the company requires a serious overhaul.

“Unilever has a double problem,” AllianceBernstein analyst Bruno Monteyne explained. Investors have lost faith in the board and management, and the company is in “structurally low growth categories.”
Monteyne believes Peltz will return Unilever to its roots, focusing on innovation, altering CEO compensation incentives, and speeding up deals and sales.

Peltz has been watching Unilever for months. According to the Financial Times, he bought a share in the company in January. Unilever chairman Nils Anderson said in a statement on Monday that he and Peltz had “long and constructive discussions.”

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