Why would a firm sell a major brand or business to another firm? Please provide an example.

A firm may sell a major brand or business to another firm for several strategic or financial reasons, including:

Common Reasons for Selling a Brand/Business:

1. Focus on Core Operations – The firm may want to concentrate on its primary business and divest non-core assets.
2. Raising Capital – Selling a valuable brand can generate cash to pay off debt, fund new investments, or return money to shareholders.
3. Underperformance – If the brand/business is struggling, selling it may be better than trying to turn it around.
4. Regulatory Pressure – To avoid antitrust issues, a company might sell a brand as a condition for a merger approval.
5. Strategic Realignment – The firm may shift its business model (e.g., moving from consumer goods to technology).
6. Maximizing Value – If another company offers a premium price, selling may be more profitable than keeping the brand.

Example: Unilever Selling Its Tea Business (Ekaterra) to CVC Capital (2021)

• Why? Unilever wanted to focus on its core businesses (food, home care, beauty) and reduce exposure to slower-growth segments like black tea.
• Deal Value: €4.5 billion
• Outcome: Unilever streamlined its portfolio, while CVC acquired a strong tea brand (Lipton, PG Tips, etc.) with growth potential.

Another example is Procter & Gamble selling Pringles to Kellogg’s (2012) to exit the food business and focus on household and personal care products.