Unilever seals Bestfoods deal

Unilever is known for brands such as Persil

Anglo-Dutch consumer goods giant Unilever has sealed a £13bn deal to buy Bestfoods, the US maker of Hellmanns Mayonnaise and Skippy peanut butter.

Unilever - maker of a range of goods from detergent to ice cream - started talks with Bestfoods last month and Tuesday's $20.3bn offer is 11% higher than its original bid of $18.4bn.

Unilever will also take on about $4bn of Bestfoods debt, bringing the value of the deal to $24.3bn.

The deal will be the latest in a series of acquisitions for Unilever, which wants Bestfoods in order to have more top-name brands in its portfolio and also to boost revenue growth in the US.

Marmite is one of the Bestfoods brands

Unilever brands include Lipton teas, CloseUp toothpaste and Calvin Klein products, while Bestfoods brands include Marmite and Knorr soup.

Food giant

"This transaction creates the pre-eminent global food and consumer goods company," Unilever co-Chairman Niall FitzGerald in a statement.

The merger is expected to create savings of $750m a year. It will do this by stripping out duplication and by combining the two companies' already sizable buying power.

Unilever's profit margins have been sagging recently, and it has been clearing out many of its older brands and looking to boost value.

Although it has a strong position in the US detergent market, it was weaker in many higher margin food areas.

"This greatly increases the size and strength of our business in the United States," Unilever's Fitzgerald said.

Bestfoods initially rejected the Unilever offer, which it said undervalued the company.

The US company had been interested in buying Campbell Soups. Bestfoods had also been linked in the rumour mill to Heinz and Diageo.

The Bestfoods management is expected to play an "important role" in the new company, Unilever said.

The Bestfoods management is well regarded in the industry, and the inclusion of top managers has been considered critical to their agreeing to the takeover.