Unilever Wins 99.8% Buyback Approval as €15.7bn Foods Spin-Off Gathers Pace

Despite 99.8% shareholder approval for share buybacks, Unilever stock lingers near a 52-week low amid execution risk and the planned Foods separation with McCormick.

Unilever’s shareholders have delivered an overwhelming vote of confidence in the company’s capital allocation strategy, yet the stock continues to languish within a whisker of its 52-week low. At Friday’s close of €48.59, the shares have shed more than 12% since the start of the year and are trading barely above the recent trough. The gap to the 50-day moving average of €51.55 highlights a market that is still pricing in execution risk rather than reward.

The near-unanimous AGM mandate – 99.8% of votes cast in favour of authorising share buybacks – hands management the flexibility to press ahead with a €1.5bn repurchase programme set to begin in the second quarter. That follows a similarly sized programme last year and forms part of a multi-year plan to return approximately €6bn to shareholders by the end of the decade. The buyback, alongside a quarterly dividend of £0.4046 per share (equivalent to roughly $0.54, yielding about 3.4%) that went ex-dividend in May and is payable in June, provides a steady income floor. But the real catalyst investors are waiting for is structural.

The centrepiece of Unilever’s transformation is the planned separation of the bulk of its Foods business and a merger with McCormick, excluding India and a handful of other regions. The remaining Home & Personal Care arm would generate pro forma sales of around €39bn, while the emerging-markets share would climb above 60% – a boost for long-term growth but also an amplifier of currency and political volatility. The transaction, expected to close by mid-2027, is set to unlock $15.7bn in cash proceeds. The use of those funds remains a hot topic, with rating agencies already flagging a negative outlook because of the narrower business mix.

Operationally, the company is delivering steady if unspectacular progress. Underlying sales rose 3.8% in the first quarter of 2026, powered by a volume increase of 2.9%. The so-called Power Brands, which account for roughly 78% of turnover, grew 5.0%, and digital channels are gaining traction thanks to increased use of AI in marketing and consumer engagement. Yet that performance has not been enough to lift the shares out of their rut. The mixed picture – solid demand in emerging markets like India and Latin America contrasting with sluggishness in developed economies – means the stock remains hostage to the broader narrative of restructuring credibility.

The next major checkpoint arrives in July 2026, when Unilever reports its second-quarter and first-half results. By then, the market will expect clearer timelines on three fronts: progress on the McCormick deal, how the $15.7bn in expected proceeds will be deployed, and the commitment to keep net debt at roughly two times underlying operating profit. Until then, the burden falls on the Power Brands to demonstrate that they can compensate for softness in the West, while the buyback provides a tactical cushion. The AGM vote may have been near-unanimous, but the stock price shows that conviction on the trading floor is far from uniform.