Dear Octopus

Not since Ford Motor Co. stock first went on sale five years ago had Wall Street greeted a newcomer to the New York Stock Exchange with such enthusiasm. No sooner had the shares of giant Unilever, the world's second biggest* company outside the U.S., been posted on the Big Board than traders rushed in to make UN (the Exchange symbol for Unilever's Dutch shares) and UL (for Unilever's English shares) the first and second most active stocks on the market. For four days Unilever trading dominated the Street. At week's end, even after some of the early buyers began selling to pocket quick profits, Unilever N.V. stock (Dutch) stood at 54 5/8, up 1 3/4 points for the week, and Unilever Ltd. (English) at 27 7/8, up 5/8.

Despite their eagerness to get a piece of Unilever, even some of Wall Street's professionals had only an imperfect notion of what they were buying into. And to the ordinary investor Unilever presents an even hazier image. Few U.S. housewives realize that they are fattening Unilever's coffers when they bring home Lux, Lifebuoy. Handy Andy, Rinso or Surf soaps, Imperial or Good Luck margarines, Spry shortening, Pepsodent toothpaste, Lipton's tea and soups, or Wishbone salad dressing.

From its Ionic-columned London headquarters building overlooking the Thames, Unilever conducts a globe-straddling business. Besides producing paper, plastic and chemicals, and operating a fleet of oceangoing freighters, Unilever sells soap, margarine, cooking oils, toilet articles, animal feed, canned and frozen foods, ice cream and sausages. Its 400 MacFisheries stores in Britain make it the world's largest fishmonger. One Unilever subsidiary, the United Africa Co., is the largest trader in Africa; another cultivates 213,710 acres of rubber, palm oil, cocoa and coffee plantations in six countries. With an annual ad budget of $300 million, Unilever is the world's biggest advertiser and, not surprisingly, operates one of Britain's largest advertising agencies. All told, Unilever includes 104 major companies, has 448 direct or indirect subsidiaries in 53 countries, and sells 1,200 different products. From this sprawling empire, Unilever last year drew net sales of $3.9 billion and profits of $145 million.

Tail Chasing. Unilever is a coalition of once bitter competitors. The English branch was started in 1884 by William Hesketh Lever--later Viscount Leverhulme of the Western Isles--who left his father's wholesale grocery business to open a soap factory with his brother. With intensive advertising and merchandising that was ahead of his time, Lever made his Sunlight brand the world's leading soap and gathered together an industrial complex based mainly on products from fats and oils. Meanwhile, in an overlapping segment of the fat and oil industry, two Dutch margarine-making families --the Van den Berghs and Jurgens--battled each other in a Hatfield-McCoy feud for years until, exhausted, they finally merged. Then, indulging in the fine European preference for cartels over competition, the Dutch and British companies merged to form Unilever in 1929 to "stabilize" the fat and oil market.

In a mind-boggling maneuver to avoid double taxation (from Britain and Holland), the ex-competitors set up Unilever Ltd. and Unilever N.V. (for Naamlooze Venootschap, or limited liability) as two separate holding companies that divide Unilever's assets but pool its profits. Each has a board of directors that controls the board of the other. This tail-chasing organizational scheme works only because the same men are on each board. Although Unilever Ltd. Chairman George Cole, 55, and Unilever N.V. Chairman Frederik Jan Tempel, 61, run the company from adjoining offices. Cole--a husky. low-key executive who started out as a $4.20-a-week junior statistician with United Africa 38 years ago--is popularly considered top man.

Not Bad Ground. In its early years, Unilever was so tightly controlled from the home office that it was bitingly called "Dear Octopus" by its employees. ("You had to cable London before you went to the bathroom," complained a Canadian executive.) But now autonomy is the rule. "Once the managers clear their estimates at the end of the year," says Co-Chairman Tempel. "they are free to go ahead.''

The key to Unilever's present-day success lies in its management's skill in knowing when to go ahead--and when to pull back. In Europe they are driving forward, particularly with frozen foods; but in Africa, they are dealing delicately with threats from the new nations to nationalize chunks of the highly profitable United Africa Co. (TIME, May 26). Says Co-Chairman Cole philosophically: "If they want things in their own hands, you help them do it. Then you find something else to do yourself."

This philosophy explains the move to the New York Stock Exchange. Unilever wants to hedge against possible losses in its African trouble spots with more U.S. business. Last April it began its American expansion by buying the Good Humor Corp. for $8,200,000. The newly acquired Big Board listing will make it easier for Unilever to work stock-trade deals for still more U.S. companies and to borrow additional expansion capital from American sources. Says Co-Chairman Tempel: "We've only got 13% of our turnover in North and South America now. We want more. America's not bad ground."

*Biggest non-U.S. company: Royal Dutch/ Shell.

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