Unilever Buys Ben & Jerry's, Slim Fast
By Matt Paolucci

Consumer goods giant Unilever NV (UN) said Wednesday it has agreed to buy U.S.-based SlimFast Foods Co. and Ben & Jerry's Homemade, Inc. (BJICA) in a combined deal worth about $2.62 billion.

The Anglo-Dutch Company will pay $2.3 billion in cash for SlimFast, a nutritional products and health-snack business. Ben & Jerry's, the South Burlington, Vt., ice-cream maker with a conscience, approved Unilever's $43.60 per-share bid, in a deal the companies valued at $326 million. Just last December, Unilever had offered to buy Ben & Jerry's for $225 million.

Shares of Ben & Jerry's were up $8.13 at $43.06, and Unilever shares also moved higher, up $1.75 to $51.75 in midday trading.

The more-established food companies are all looking to enhance their bottom lines by entering the health food market, which currently enjoys growth of 30 percent a year.

For example, Nestle's USA recently bought closely held Power Bar, the manufacturer of energy and nutrition bars. Also, Kraft Food jumped in the game with its purchases of PowerBar rival, Balance Bar, and privately held soy-food maker Boca Burger. Add to that General Mills' agreement to buy organic food concern Small Planet Foods and Kellogg's purchase of Worthington Foods, which makes soy-based vegetarian items.

SlimFast, which is a privately owned company, holds 45 percent of the $1.3 billion nutritional supplement and weight- management market in the U.S. In the year ended November 1999, SlimFast had net sales of $611 million and operating profits of $125 million.

The purchase of Ben & Jerry's, if approved, will give Unilever a super-luxury brand in the large U.S. market. Unilever's current U.S. ice-cream business includes Breyers, Good-Humor, Popsicle and Klondike brands. Ben & Jerry's has about a 4.6 percent share of the fragmented U.S. ice cream market, and makes about 90 percent of its sales in North America.

With an average price of $3.10 a pint, Ben & Jerry's is the most expensive of any major brand in the United States, ahead of Haagen-Dazs at $2.91, according to Information Resources Inc.

Parties on both sides stressed that the ice-cream company, which is known for its charitable contribution and uses only Vermont dairy products, all-natural ingredients and spurns hormone-treated milk or cream, won't lose its soul in the deal. The premium dessert maker would stay in Vermont after the transaction is complete.

Ben Cohen and Jerry Greenfield, co-founders of Ben & Jerry's, stated, "While we and others certainly would have preferred to pursue our mission as an independent enterprise, we hope that, as part of Unilever, Ben & Jerry's will continue to expand its role in society."

Richard Goldstein, president of Unilever Foods North America, said Unilever hoped to take the brand global. The company, in the past, has been hobbled by not having its own distribution system, forcing it to rely on rivals such as Dreyer's Grand Ice Cream and Haagen-Dazs to bring its product to stores.

The deals come about two months after UN said it planned to cut 25,000 jobs and close as many as 100 factories globally as part of a wide-ranging restructuring to boost earnings and spur sluggish growth. Unilever said it would invest as much as $1.58 billion in added marketing for 400 brands after it finishes culling its portfolio of more than 1,600 brands.

Unilever spokesman Mike Haines said the firm expects the U.S. market for "super-premium" ice creams to grow by 5 percent to 6 percent over the next five years, and at a faster rate in some overseas markets.