Unilever, Ben and Jerry, and the head freeze from hell








As writers, were not fans of old cliches (bad for the brand, so to speak) but the old well-worn phrase "the road to hell is paved with good intentions" seems apt when Anglo Dutch consumer packaged goods giant Unilever draws the ire of investors, senators and a head of state over its ethical ambitions and an ill-advised M&A decision made 20 years ago could cost the company billions and even their ability to fund their business. 

M&A is hard at the best of time as the pitfalls are many (just ask at&t and AOL) but that ill-fated (read stupid) to keep uber ethical ice cream maker Ben and Jerry's board largely independent during its 326m deal has come back to burn Unilever is so many ways it has the company spinning its wheels on how get out predicament caused by Ben and Jerry's decision to stop selling ice cream in the occupied Palestinian territories has put the company in a tough position to say the least. 

 
Ben and Jerry's have been a good acquisition for Unilever as the company remains one of the largest ice cream brands in the world and also the largest ice cream manufacturer by sales. However, its political activism is putting its parent company under enough pressure to make it consider selling or spinning the company out. 

Unilever been under pressure from all quarters Israel prime minister warned there would be, in his words “severe consequences” for exiting. Facing pressure from a head of state is one thing but what concerns us is the pressure mounting where it matters: it’s share and bondholders. Share and bondholders haven’t been fans of Unilever ethical ambitions in the past but for some ben and jerry’s exit was the straw that broke the camel’s back. US state pension funds have taken turns with New York, New Jersey and Illinois providers taking turns in divesting Unilever's shares and corporate bonds citing Ben and Jerry's decision to exit the occupied territories as the main reason. 


While this crisis may prove to be an opportunity for investors (like us) who no dog in this fight, there are other investors who are not fans of Unilever's ethical ambitions and think it's hurting the company and their concerns aren't unfounded. 


The company for a while has been aggressive in taking ethical stances from where sources its products to its focus on brand purpose which has number driven investors wishing the company would stick to slinging soap and step off the soapbox.  our stance, it’s refreshing that company as large as Unilever is willing to stand up for something other than shareholder value but if these ethical ambitions threaten the companies potentially affect the company ability to fund itself (trust us, that’s where heading if Unilever doesn’t wilt) shareholders are well within their right to urge the company to reconsider to ethical ambitions 


whatever the case, the Ben and jerry debacle is about to put Unilever's ethical ambitions to the test, a test we and many of investors wouldn’t mind them failing miserably.


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