Reuters asks today whether we are watching the “death of the consumer conglomerate.” Its Ice Cream division became the independent Magnum Ice Cream Company in December. On March 31, Unilever agreed to separate Foods and combine it with McCormick, pending approvals, with closing expected in mid-2027. Foods in India, Nepal and Portugal, Lifestyle Nutrition, Buavita, and Lipton RTD sit outside the deal.
This story started in 2022, with an org chart.
Unilever moved away from a heavy matrix and created five end-to-end Business Groups. Each got responsibility for its own strategy, growth, results, and P&L. Most functional teams moved into the groups. Unilever Business Operations supplied technology, systems, and processes. A lean Corporate Centre held global strategy, functional expertise, and standards.
I liked the design then: make the businesses real businesses; make the center a platform. In January, I wrote that divisions were becoming more differentiated: strategy-specific leaders, clear P&Ls, thinner centers.
An autonomous division can be a stepping stone between a conglomerate and an independent company. Give a business its own strategy, leadership, resources, capabilities, and economics, and it becomes easier to see as a company. It also becomes easier to separate.
The operating models already contained some obvious breakpoints: frozen distribution (this is a Whole Thing™, btw) for Ice Cream; different customers and a large foodservice channel for Foods. The 2022 design turned those differences into management boundaries, with leadership, resources, decisions, and P&Ls gathered inside each one.
The sequence goes something like this:
- Break the matrix. Give categories end-to-end accountability.
- Thin the center. Turn shared infrastructure into services the businesses consume.
- Price the center's activities. Compare the value created by sharing against coordination and separation costs.
- Profit?
Unilever’s own language is direct on this topic. It expects “no revenue or operational dis-synergies” from separating Foods because Foods already has operational and go-to-market independence from the remaining groups. It also expects €400–500 million in stranded costs and another €500 million of restructuring through 2029. Cleaner ≠ free.
Modular operating models create optionality. This is Dissolvability at company scale: a unit can leave without rebuilding the whole machine. Once the center becomes a platform, you can see which capabilities are shared, what they cost, and what common ownership contributes.
The market has opinions, with Unilever trading at 11.5 times enterprise value to core earnings, behind P&G at 14.8 and L’Oréal at 17.5. Magnum’s shares are up roughly a third since listing, mostly because they jumped as much as 18% when Reuters reported that Blackstone and CD&R were circling. Its later 4.7% first-half organic growth helped.
Foods/McCormick received the opposite reaction: Unilever fell 7% and McCormick roughly 5% as investors balked at the long timeline, the separation costs, and a structure that leaves Unilever and its shareholders owning 65% of the combined food company.
The old conglomerate hid those choices inside coordination, and the modular, platform-pilled firm shines a light on them. Divisions are companies in waiting when common ownership fails to deliver value to the divisions or to shareholders, and good organization design changes which options are available to al.
