JOHANNESBURG - Unilever has agreed to a  deal with South African investor Remgro, buying Remgro’s 26% stake in its South African subsidiary in exchange for its southern African spreads business and a cash payment.

The deal is the first step in Unilever’s broader exit from its shrinking spreads business, a move it promised earlier this year following an unsolicited $143bn takeover offer from Kraft-Heinz.

The Anglo-Dutch consumer goods maker, owner of Dove soap and Ben & Jerry’s ice cream, said it would buy Remgro’s 25.75% shareholding in Unilever South Africa in exchange for the spreads business in South Africa, Botswana, Lesotho, Namibia and Swaziland plus R4.9bn in cash.

The deal values the spreads business at R7bn, representing a multiple of 13.4 times core earnings.

A recession, unemployment of about 27% and weak growth prospects have constrained consumer spending in Africa’s most advanced economy with Unilever rivals Tiger Brands and AVI reporting slower profit growth.

Unilever’s overall spreads and margarine business, which includes brands such as Flora, Becel and Country Crock, is expected to fetch about £6bn (R107bn). It has been in decline for years, as consumers eat less bread and less margarine, but it has strong profit margins.

That makes it attractive for private equity firms, several of which have already been forming bidding consortia, according to sources.

Unilever hopes to clinch a deal by the end of the year, or in early 2018.