Why Britain's Top Brands Are Being Sold or Split by Their Owners
A weak pound and a sluggish economy mean some of Britain's most iconic brands are now up for grabs. From Primark and Magnum to Castrol and Costa Coffee, corporate Britain appears to be under siege as owners consider sales or demergers to boost value.
Recent Asset Sales and Spin-Offs
Recent months have seen a flurry of activity. Companies including BP, GSK, Reckitt Benckiser, and Whitbread have sold or spun off brands such as Castrol, Calgon, Sensodyne, Aquafresh, Air Wick, Night Nurse, Magnum ice cream, Ben & Jerry's, and Costa Coffee to new owners. More famous names could soon follow.
Associated British Foods is reportedly considering a demerger for fast-fashion giant Primark. Meanwhile, America's McCormick has tabled a bid for Unilever's food business, which includes Knorr and Hellmann's. There is speculation that McCormick may be more interested in Unilever's sauces and spices brands than Marmite, potentially leading to quick resales if a deal proceeds.
Local Impact and Global Trend
In some ways, this is business as usual. In 2025, Britvic was bought by Carlsberg, and WH Smith was sold to Modella Capital and broken up. Russell & Bromley, the high-end shoe retailer, is also at risk of a split separating its online brand from physical stores.
On one hand, foreign investment in British brands keeps City bankers busy with deals and bonuses, which generate tax revenue. However, the downside is a perception that the UK is for sale at bargain prices, with domestic investors undervaluing attractive assets. A sluggish economy and weak pound make it harder for takeover targets to fend off bids.
Russ Mould of AJ Bell notes this is part of a global trend. Examples include Kellogg's 2023 split into Kellanova (snacks like Pringles) and WK Kellogg (cereals), Kraft-Heinz's brief consideration of a break-up, and Keurig Dr Pepper's ongoing split following its purchase of JDE Peet's coffee business.
Reasons for Sales and Break-Ups
The primary driver is often a flagging share price, with companies seeking a quick boost by selling parts to reward sceptical investors. Soaring borrowing costs also play a role; after years of near-zero interest rates, many debt-laden firms now need to pay down loans, sometimes by selling businesses they'd prefer to keep.
In times of global caution, investors favour sales over risky "transformational" deals. Activist investors like Elliott Partners are key players, seen either as corporate sharks or as necessary market forces keeping CEOs accountable.
Veteran observer David Buik highlights Elliott's influence, citing Unilever's sale of its Ice Cream Division (including Magnum) for €7.8 billion. Unilever's share price rose 33% from 2023 until the Iran war, though it has since been hammered, showing the complexities of such deals.
Activist Investors: A Necessary Evil?
One anonymous banker expresses fatigue with activists, arguing that spin-offs and sell-offs are often done merely to placate them, causing distraction and expense for boards. However, Michael Brown of Pepperstone suggests activists provide a needed nudge for companies to streamline operations and focus on core strengths.
BP is a prime example, with Elliott and CEO Meg O'Neill encouraging a return to oil and gas roots over costly renewables ventures. For Primark/ABF, a demerger could allow ABF to refocus on its core food and agriculture business, though its conglomerate structure offers useful diversification, as seen during the pandemic.
Who Is Next?
Brown predicts the London Stock Exchange Group (LSEG) could be next, given Elliott's significant stake and its diverse operations spanning the exchange, data, and Eikon platform. While Elliott currently focuses on buybacks, a future split into divisions to improve returns is plausible.
Private equity, though often criticised, can help struggling companies by taking them private to restructure away from share price pressures. For instance, THG Group demerged its Ingenuity division in 2024, leading to a trebled valuation by 2025 after difficult but necessary changes.
For companies remaining public, overseas buyers with deep pockets continue to eye UK assets. Whether this trend benefits the UK economy, jobs, and long-term stability remains an open question, but it underscores a period of significant corporate upheaval.
