She describes a fear of the brands being ‘milked’ to the detriment of top-line growth.
“Unilever in the hands of Kraft Heinz would not have continued to grow.”
Further, Buffett and 3G are not the types to make a hostile bid, she points out.
Especially with the governance of the Dutch board that would take into account a much more rigorous level of due diligence, accounting for employees, customers and far broader level of responsibility, a very ugly battle indeed would have ensued.
So what’s next?
Di Palma adds: “I don’t think we’re seeing the end of the M&A boom.
“I think all these companies – L’Oreal, Colgate-Palmolive – will continue to buy small, disruptive brands and believe that is still their best strategy.
“They are still paying good multiples and it’s a paying a relatively small amount for an opportunity to expand their brand portfolio.”
At the last Unilever investor meeting, Polman promised to increase the target margin range from 20-40 basis points (bps) to 40-80bps.
Di Palma suggests if he remains at the higher end of that, disposes of its spreads business – which has been hampering sales for several years now or looked to make a larger acquisition itself – that would be a good start for the parent of Marmite, Knorr and Domestos.
For Kraft Heinz – king of macaroni & cheese, ketchup and baked beans – it might look elsewhere for a personal care portfolio and take on the multi-faceted Unilever at its own game.
In both cases, one might expect the executives at Colgate-Palmolive to be fairly busy over the coming months.