The Unilever Saga Continues​

By Jake Rickman​

What do you need to know this week?

Last week, we examined Unilever’s failed attempt to acquire the consumer healthcare division of GlaxoSmithKline (GSK), as well as the market’s wider scrutiny of large conglomerate companies like GSK and Unilever.

Over the weekend, it was revealed that US activist hedge fund Trian Partners had acquired a stake in Unilever. (No doubt inspired by our newsletter!)

Trian Partners is an $8.5bn hedge fund that has earned a reputation for pressuring the board of consumer goods companies like PepsiCo and Cadbury.

Unilever’s returns have consistently underwhelmed investors as of late: in five years, shares have grown less than 5%. Alan Jope was appointed as CEO in 2019 to increase the company’s value for shareholders. Now that he has an activist hedge fund to contend with, he may find his job that much more challenging.

Following on from this weekend’s news, on Tuesday, Unilever announced it was slashing 1,500 jobs worldwide, which accounts for 1% of its workforce. Most of these cuts are senior management redundancies as part of a wider organisational restructuring.

Why is this important for your interviews?

The rapid pace of these developments is a reminder of how dynamic the market can be. If nothing else, these back-to-back headlines demonstrate the importance of keeping your ear close to the ground and checking the news frequently. If an interviewer asks you about a relevant commercial news story and you bring up a story and reference the most recent changes, it demonstrates to interviewers that you are commercially engaged.

These developments also underscore the fact that market news does not happen in a vacuum. Things like shareholder scrutiny and investor activism are not just abstract statements. While Unilever’s plan to slash jobs was likely in place well before Trian acquired its position, it demonstrates the interconnectedness of key market figures like investment funds and large corporates.

The fact that conglomerates like GSK and Unilever are becoming targets for activist investors suggests there are wider forces at play impacting their ability to deliver investor results (something we analysed in more detail last week).

Interviewers will value your ability to connect the dots and explain market news not just as a list of headlines but as an ongoing narrative.

How is this topic relevant to law firms?

Employment lawyers will have advised Unilever on its extensive redundancy programme. They will have helped Unilever navigate its various obligations as an employer, such as ensuring that all the affected employees were fairly selected and adequately consulted, and that the Secretary of State was duly informed (if redundancies are made within a 90 day window).

Firms known for advising corporate employers on significant redundancies include Allen & Overy, Baker McKenzie and Lewis Silkin.


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