Ben & Jerry's Sells Out To Unilever
Apr. 12, 2000
MONTPELIER, Vt. (AP) _ Ben & Jerry's, the counterculture-capitalist ice cream maker, is selling out to the corporate suits.
Unilever, the multinational conglomerate that makes such products a Wisk detergent, Q-tips and Popsicles, is paying $326 million for the company started by two ex-hippies in an old gas station in 1978.
Unilever is also making sure all the bases are covered by buying the weight-loss business Slim-Fast Foods for $2.3 billion.
The Ben & Jerry's deal announced Wednesday would bring the socially conscious maker of funky ice cream flavors like Chunky Monkey and Cherry Garcia under the same corporate umbrella as Good Humor and Breyers ice cream.
It was an outcome neither Ben Cohen nor Jerry Greenfield favored. But the two founders were under pressure from shareholders to sell to Unilever, which offered $43.60 per share, or nearly 25 percent over Ben Jerry's closing price Tuesday of $34.93 3/4.
Ben & Jerry's shares shot up 23 percent Wednesday, rising $8.12 1/2 on the Nasdaq Stock Market to close at $43.06 1/4.
``While we and others certainly would have pursued our mission as an independent enterprise, we hope that, as part of Unilever, Ben & Jerry's will continue to expand its role in society,'' Cohen and Greenfield said in a statement.
Unilever gave assurances that Ben & Jerry's charitable giving will continue.
And the founders' disappointment may have been assuaged somewhat by the fact that Cohen's stock was worth about $39 million; Greenfield's was worth about $9.6 million, based on holdings reported last month to the Securities and Exchange Commission.
Ben & Jerry's has played up its image as a small Vermont company whose goal is more lofty than simply maximizing profits. It has long bragged of giving 7.5 percent of its pretax profits to charity. It is one of Vermont's most beloved corporate citizens, and its plant is a big tourist attraction.
Ben & Jerry's CEO Perry Odak said it will continue manufacturing exclusively in Vermont, paying a premium for milk from the state's dairy farmers and using milk only from cows not treated with growth hormone. It will also continue giving employees three free pints of ice cream per day.
Unilever plans to use Cohen and Greenfield as ``caring capitalism'' ambassadors, preaching the gospel of social concerns, product quality and profits, Odak said. The two men withdrew from the day-to-day running of Ben & Jerry's several years ago.
Ben & Jerry's will operate as an independent subsidiary, with one Unilever member on its board.
Richard Goldstein, president of Unilever Foods North America, said the plan is to keep up Ben & Jerry's record of social activism.
``Much of the success of the Ben & Jerry's brand is based on its connections to basic human values, and it is our hope and expectation that Ben & Jerry's continues to engage in these critical, global economic and social missions,'' he said.
Not everyone was buying it.
Leah Poisson, 29, of Biddeford, Maine, went on the Ben & Jerry's factory tour in Waterbury on Wednesday. ``After going on the tour, I was feeling all loyal, thinking, `Oh man, wow, these guys are great,''' she said. ``But now I know this, I might as well just buy someone else.''
In January, Michael Garrett, the owner of four Ben & Jerry's franchises in Connecticut and New York, had urged franchisees to join forces to stop the sale to corporate interests. On Wednesday, however, Garrett welcomed the sale.
He said it ``might allow us to increase what we do best, which is to be involved in our community and to be socially conscious.'' Garrett also said he saw Unilever's purchase as an effort to boost its own profile in the world of ``socially conscious'' businesses.
Analysts have the deal makes good business sense by giving Ben & Jerry's access to Unilever's worldwide distribution system.
``Unilever is in an ideal position to bring the Ben & Jerry's brand, values and socially conscious message to consumers worldwide,'' Goldstein said.
Slim-Fast is a privately owned Florida company that makes nutritional supplements and food for people who want to lose weight.