Ben & Jerry’s and Slim-Fast in Unilever’s Cart

Unilever wants both Chunky Monkey and the just plain chunky.

The food and consumer-products giant confirmed speculation Wednesday and agreed to buy quirky ice-cream maker Ben & Jerry’s Homemade Inc. for $326 million. Unilever then added an ironic twist by agreeing to buy the weight-loss company Slim-Fast Foods Co. for $2.3 billion.

Ben & Jerry’s, based in South Burlington, Vt., is the ice-cream maker founded by two former hippies and known for its unusual flavors--including Chunky Monkey, Cherry Garcia and Dastardly Mash--as well as its strong emphasis on social activism and an ethically minded business style.

But earlier this year, after its stock price slumped in 1999, Ben & Jerry’s confirmed it was talking about a merger with Unilever.

The mere specter of home-grown Ben & Jerry’s possibly selling out to a multinational sparked a mini-grass-roots campaign among true believers, who staged rallies across the country to generate support for keeping the company independent. A group of socially conscious investors even made a bid at one point to buy the company.

But Wednesday, Ben & Jerry’s co-founders, the tie-dyed T-shirt wearing Ben Cohen and Jerry Greenfield, said: “While we and others certainly would have preferred to pursue our mission as an independent enterprise, we hope that, as part of Unilever, Ben & Jerry’s will continue to expand its role in society.”

The founders’ disappointment might have been assuaged somewhat by the fact that at Unilever’s price, Cohen’s stock is worth about $39 million and Greenfield’s about $9.6 million, based on holdings they reported last month to the Securities and Exchange Commission.

The pair said that Unilever has vowed to follow many of Ben & Jerry’s tenets, including keeping its Vermont employment and manufacturing base, “paying our workers a livable wage with complete benefits” and buying milk for their ice cream “from Vermont family farmers who agree not to use growth hormones on their cows.”

Unilever, which makes a panoply of consumer items, including Breyers ice cream, Lipton tea, Wisk detergent, Dove soap and Aim toothpaste, also will continue to contribute 7.5% of Ben & Jerry’s pretax earnings to the ice-cream maker’s philanthropic foundation. The huge Anglo-Dutch concern has annual sales of $48 billion.

Even so, “they certainly get a powerhouse in Ben & Jerry’s,” analyst Jeffrey Kanter of Prudential Securities in New York said of Unilever. The purchase lets Unilever enter the market for so-called super-premium ice creams, which typically carry higher prices and fatter profit margins than mid-tier brands such as Breyers.

Unilever agreed to pay $43.60 for each of Ben & Jerry’s common shares. After the announcement, the ice-cream maker’s stock soared $8.13 a share to $43.06, on Nasdaq. Unilever’s American depositary receipts gained 75 cents to $27.88 on the New York Stock Exchange.

Cohen and Greenfield were friends from childhood who started their company in 1978 in a renovated gas station in Burlington with an investment of $12,000. The company went public in the mid-1980s and the stock had been showing steady growth until mid-1999, when it went into a sharp decline, losing nearly 40% of its value between last July and November.

The stock fell even though Ben & Jerry’s posted a 45% surge in 1999 profit--excluding a one-time charge--to $9 million, while sales rose 13% to $237 million. The $8.6-million pretax charge, stemming from a restructuring of the company’s manufacturing operations, resulted in a net loss for the fourth quarter of 1999.

Unilever, meanwhile, has worked to slim itself down in recent months because the company’s enormous size--it recently had some 1,800 branded products worldwide--has hobbled its sales and earnings growth in the last few years. In February, it announced plans to close as many as 100 plants, cut 25,000 jobs and eliminate hundreds of less-profitable brands.

The company plans to use those savings to pump up its remaining brands and to acquire existing popular brands, such as Ben & Jerry’s and Slim-Fast.

“Unilever is showing real focus on brand management,” said Folkert Jan van der Veer, an analyst at Effectenbank Stroeve in Amsterdam.

Privately held Slim-Fast, based in West Palm Beach, Fla., is a leading provider of weight-loss and nutritional shakes and snack bars. It had sales of $611 million in its fiscal year ended in November, Unilever said.