KKR swallows Flora in £6bn Unilever deal

A former owner of Boots, the high street chemists, has clinched a £6bn takeover of Unilever (NYSE: UL - news) 's spreads business, taking brands such as Flora into private ownership.

Unilever announced on Friday that it had struck a deal with KKR, the buyout giant, to sell the global division after an auction lasting several months.

The announcement came just hours after Sky News revealed that one of the rival bidders, CVC Capital Partners, had been eliminated from the sale process for the second time.

Unilever's decision will hand ownership of Flora, I Can't Believe It's Not Butter and ProActiv to KKR after it also saw off competition from Apollo Management, another investment firm.

:: Unilever's £6bn Flora auction thinly spread as CVC (Taiwan OTC: 4744.TWO - news) drops out

The sale is an important component of Unilever's efforts to improve returns to shareholders, outlined earlier this year.

Unilever decided to conduct an auction of the under-performing spreads operations two months after the FTSE-100 company was targeted by an unsolicited £115bn takeover approach from Kraft Heinz (Swiss: KHC.SW - news) , the US-headquartered food giant.

The move from Kraft Heinz sparked a hostile reaction from the Unilever board and rang alarm bells in Downing Street, where Theresa May had vowed to restrict unwanted foreign takeovers.

Paul Polman, Unilever's chief executive, said the sale price "recognises the market-leading brands and the improved momentum we have achieved".

"I am confident that under KKR's ownership, the spreads business with its iconic brands will be able to fulfil its full potential as well as societal responsibilities."

Unilever said it would return the net cash proceeds from the disposal to shareholders unless it found acquisition opportunities that would create greater value.

This year, the company has turned to faster-growing categories for takeover opportunities, snapping up the online-based Dollar Shave Club for $1bn last year and Mae Terra, a Brazilian organic food company, among other acquisitions.

Sky News revealed last month that Unilever's board had begun a formal succession planning process ahead of Mr Polman's anticipated retirement in about 18 months' time.

The spreads category has been in long-term decline as increasingly health-conscious consumers have turned to butter-based products.

The business being sold by Unilever to KKR trades across 66 countries, and had a turnover last year of just over €3bn.