By Senad Karaahmetovic
American businessman and activist investor Nelson Peltz is set to join the board of Unilever (NYSE:UL), raising the pressure on the consumer goods giant as it looks to revamp its strategy.
Peltz, who holds a roughly 1.5% stake in Unilever, is expected to join the company as a non-executive director in July and become a member of the board’s compensation committee.
The move comes as Unilever attempts to remodel its business strategy after its unsuccessful $63 billion takeover of GSK’s consumer healthcare business a few months ago.
"We look forward to working collaboratively with management and the Board to help drive Unilever's strategy, operations, sustainability, and shareholder value," Peltz said in a statement.
Peltz, CEO and founding partner of the asset management firm Trian, has historically expressed interest in consumer-focused businesses and pushed for strategic changes at the hedge fund’s portfolio companies.
Four years ago, Trian pushed for a series of changes at Unilever’s competitor P&G (NYSE:PG). After a couple of months-long proxy fight, Peltz joined P&G’s board.
BofA analyst Eva Quiroga believes Peltz is likely to focus on improving the organic top-line growth, which is described as the company’s “Achilles' heel”.
“We believe that to address Unilever’s organic topline growth woes, focus will likely be on increasing investment in the core business (Beauty & Personal Care), while reducing the exposure to slow-growing categories (notably F&R) – and potentially separating the business by category/ regional fault-lines,” Quiroga told clients in a note.
RBC and Credit Suisse (SIX:CSGN) analysts praised Peltz’s appointment to Unilever’s board, saying that the activist investor could bring positive amendments to the company’s culture.
"If not that, at least the presence of an activist investor can drive collaboration amongst Unilever's other shareholders and raise Unilever's profile in the media to increase accountability of ongoing changes," RBC analysts wrote to clients.
Unilever shares are up 6.6% in pre-market Tuesday.