Mega-Merger Target Unilever Is Highly Active in Private Markets

On Friday, Feb. 17, news broke that Unilever had rejected an initial $143B takeover bid from consumer goods conglomerate Kraft Heinz. While the price would make the deal one of the largest ever, Unilever said the offer “fundamentally undervalues” the company.

In light of the news, we used CB Insights data to take a look at Unilever’s own investment and acquisition activity. In contrast to Kraft Heinz, Unilever has been extremely active in private markets over the past several years, through acquisitions of startups as well as private market investments through its Unilever Ventures arm.

Kraft Heinz, meanwhile, has in recent years stayed on the sidelines of the startup investment and acquisition game, this offer follows Kraft’s 2015 merger with H.J. Heinz, a deal worth around $49B.

Any merger or takeover that involved Unilever could shake up the landscape for CPG private market M&A and investments, since Unilever is one of the most active corporate investors in its industry.

Perhaps most notably, amid rumors that Unilever was weighing a purchase of sustainable home goods provider The Honest Company in September 2016, they instead acquired competitor Seventh Generation for a reported $600M-700M.

Dollar Shave Club, which offers discount razors on a subscription model, highlights Unilever’s acquisition strategy — many of the company’s acquisitions have focused on personal care companies with a unique product offering that also leverage technology for improved distribution. Living Proof, for example, which Unilever acquired in December 2016, sells direct-to-consumer hair products based on patented technology (we previously looked at Living Proof’s patents here).

Unilever Ventures has focused more directly on technology innovations in its equity investments. The bulk of its portfolio companies since 2014 focus on marketing and customer engagement, rather than on specific products. It also made several plays into next-gen distribution methods. Gousto, for example, is a meal kit startup comparable to Blue Apron, and Unilever Ventures also backed Blow, which provides on-demand beauty services in users’ homes or offices.

Gousto and Blow could both offer Unilever a view into platforms that distribute packaged food and beauty products, eliminating the need for store visits and taking the brand decision out of the consumers’ hands.

We used our business social graph tool to create the visualization below, highlighting Unilever and Unilever Ventures’ investments and acquisitions. Each orange line signifies an acquisition, and each green line signifies one investment round.

The chart below details each of Unilever and Unilever Ventures’ investments and acquisitions since 2014. As the chart shows, Unilever has focused on a few areas, with acquisitions of two ice cream (gelato) brands, and multiple skincare brands, and investments customer engagement and distribution methods.

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