The buyer ignored key conditions of Ben & Gerry’s merger deal. Now the founders and former owners of the Ice Cream icon are suing Unilever’s Magnum Ice Cream spin-off for violating two clauses of the original merger agreement…
Ben Cohen and Jerry Greenfield sold Ben & Jerry’s to Unilever in 2000 for a reported $326 million. One con-dition of the deal – which was of prime importance to the founders – was that the brand would retain an independent board of directors. It was the Board’s job to protect the Brand’s social mission, no matter who owned the company, Moneywise contributor Emma Caplan-Fisher reports.
But Magnum quietly replaced all but one original director with new nominees of its own – all except for the original CEO, who was also a director. The founders want the independent board reinstated and its resp-onsibilities, “providing leadership for Ben & Jerry’s social mission and brand integrity,” restored. Magnum responded to the lawsuit claiming it was technically in the right in replacing the old board of directors. The suit simmers on…
Meanwhile…
… The new owner also cut off previously agreed funding to the Ben & Gerry’s Foundation, the found-ers’ charitable arm. And the Foundation is now suing Unilever, as well, according to Vermont Business Magazine.
“This is about more than a contract,” Liz Bankowski, President of the Ben & Jerry’s Foundation Board of Trustees, said. “It’s about whether a corporation can weaponize a governance structure, and with-hold funding when prior commitments and values become inconvenient.”
My take
I can certainly see why the founders would want to have their independent board of directors restor-ed, and the work of their charitable foundation continued as they originally envisioned it. Even if those conditions had not been specific stipulations of the merger agreement.
And I wonder why Unilever/Magnum would risk the ‘bad corporate citizen’ badge the situation pins on it, now that the lawsuits have become public knowledge. It’s clearly a case of short-sightedness at the top of an organization too big to care – either about a legal, binding contract, or the community it relies on to buy its products…
~ Maggie J.