Lawyers have warned that Unilever may struggle to offload ice-cream brand Ben & Jerry’s due to its outspoken left-wing political views and activism, according to reports.
The warnings come after Unilever announced it would look to offload low-growth brands and push further into the consumer health and hygiene market in a strategy update last week, following the revelations that it had made three unsolicited bids for GlaxoSmithKline’s consumer goods group last year.
But lawyers told the Sunday Telegraph that Unilever may struggle to offload Ben & Jerry’s due to details in the takeover contract in 2000 which handed control of decision-making to the firm, known for its strong political stands.
Ben & Jerry’s made headlines last year when it said it would stop selling ice cream in occupied Palstiniain territories occupied by Israel, which it said was “inconsistent with our values for our product to be present within an internationally recognised illegal occupation”.
Jesse Fried, Dane Professor of Law at Harvard Law School, told The Sunday Telegraph that the new owner would “step into the shoes of Unilever and inherit the current board arrangement, as the merger agreement binds Unilever as well as any successors”.
Fried warned that a new owner could decide to litigate against the issue but the prospect of a legal battle with the Ben & Jerry’s board would risk sabotaging any potential purchase.
Jonathan Turner, CEO of UK Lawyers for Israel, similarly told The Sunday Telegraph that the arrangements with the broad would “significantly restrict Unilever’s options for disposal of Ben & Jerry’s”.
Analyst Bruno Monteyne said the independent board was a “material consideration”.
He added: “It would impact the valuation that any bidder would likely want to bid for that part of food.”