The Globe and Mail’s Tom Gjelten explores the prospects of a $6 billion merger between Purely Organic, the world’s largest pure-foods producer, and Unilever, the largest organic consumer brand.
The two companies, which both have more than $600 billion in annual sales, have a combined market capitalization of $6.2 billion.
Unilev, which also has more than 100,000 employees, is the world leader in organic, with its organic brand brand, Pure Organic, leading the pack.
Unicef, a non-profit organization based in New York City, and the U.N. Development Programme, an international humanitarian organization, have worked together for more than 20 years to fight poverty and hunger.
They were the two organizations that, in the 1980s, persuaded the World Health Organization to establish a World Health Programme.
“We thought we could bring some much needed stability and peace of mind to the world,” said UNDP Deputy Executive Director Linda D’Souza.
“There’s a lot of hope that we’re just going to be able to pull this off.”
A $6-billion merger between the two companies would mark a historic moment in the organic food and beverage industry, which is already experiencing a resurgence.
Unilad, a unit of Unilead, is currently valued at $2.7 billion.
Its market cap is $2 billion, or a little more than 1 per cent of Unilade’s total market capitalisation of $15.9 billion.
The merger would create Unilady’s largest shareholder, which would have control of nearly 60 per cent.
The U.S. government is also involved in the negotiations, with a potential $1 billion in funding being offered for the merger, the Globe reported.
Unicorn Foods, a U.K.-based company that owns brands like Kefir, Kashi, and Moochie, would become the majority shareholder of Purely.
The new group, which Purely intends to call Unilader, would be a joint venture between the UAW and Unilado, which has more 1,800 employees in 40 countries.
“The Unilevers have a strong history in organic and we’re excited to be working with them to make this merger happen,” said Unicorns CEO, David Kilday.
“They’re a major player in the industry, they’ve been around for a very long time and they’re really committed to sustainability.
I think it’s really exciting to be a part of this.”
The company said it would invest $1.1 billion over the next five years to create new products and products tailored to the needs of customers.
“It’s not just about organic products,” Kildays co-founder, Steve Smith, said in a statement.
“This merger will also include a range of complementary products including a range that will benefit consumers through enhanced customer service, a new brand of Pure Organic products that will complement Uniladers existing portfolio, and a new range of products and services that will enable customers to get the freshest organic foods, products, and services, and help them live better, healthier lives.”
The merger is likely to be approved by shareholders at a special meeting in New Zealand on Wednesday.
“I think we’re at a moment in history where there’s an opportunity to transform the business,” Smith said.
“A lot of people think of it as a merger, but we’ve always been in it together.
We’re all in it for the long haul.”