The group is paying about Fr1.9bn ( pounds 220m) for a 75 per cent stake in Safra, which owns 85 per cent of Ortiz-Miko, the frozen foods and ice cream business. Unilever will also make an offer for the remaining shares in Ortiz, quoted on the French stock exchange.
Ortiz has sales of about Fr5bn, in the impulse market with the Miko brand and in the professional and catering markets. It has about 6,000 employees. Unilever's own frozen foods business has Fr3bn of sales, about a third in ice-cream products such as Carte d'Or, Viennetta and Magnum. Worldwide, it is the world's leading ice-cream manufacturer with sales of about dollars 3bn a year.
The deal brings the number of purchases by Unilever to 25 this year, although it has also sold 14 businesses, leaving a net cost of pounds 670m. In September it became the leading US ice-cream manufacturer when it acquired the ice-cream business of Kraft General Foods, part of the Philip Morris tobacco and food group.
A Unilever spokesman said ice cream was seen as a growth area for the group - it is building factories in China and has bought a Polish manufacturer - and the Ortiz purchase will give it access to markets with 'significant potential'.
In a related deal, Unilever is selling Ortiz's prepared meals business, Vivagel, to BSN, the French food company. The price was not disclosed, but Vivagel contributed Fr700m of Ortiz's sales. The deal also excludes a number of Ortiz's peripheral businesses, such as a smoked salmon manufacturer and a vegetable producer, as well as two Spanish frozen foods businesses.
The French ice-cream market is more diversified than in other countries like Britain, with a number of regional companies as well as the food giants such as Mars, Nestle and Haagen Dazs, the Grand Metropolitan subsidiary. Unilever did not disclose its market share following the deal, but the spokesman said it would be 'number one in a very fragmented market'.
Ortiz also has operations in Germany and Belgium, which account for just over a tenth of sales. Unilever said it was too early to say what it would do with Ortiz following the acquisition.
The deal is conditional on the approval of the European Commission. The UK authorities are also examining the sale of impulse bars, where retailers are generally tied to one manufacturer that supplies the fridge.
Analysts said the deal showed Unilever was sticking to its core businesses by making bolt-on acquisitions to strengthen its position in key markets.
The acquisition will be financed from Unilever's cash resources. At 30 June, it had net borrowings of pounds 1.9bn, although that had fallen to pounds 1.5bn by the end of the third quarter. Unilever's shares rose 15p to pounds 11.87 yesterday.Reuse content