GROCERY multinational Unilever has struck a £6 billion deal to sell a large chunk of its business with well-known brands.

Private equity firm KKR has emerged victorious in a three-way battle for Unilever’s spreads business to buy the under-performing operation in charge of Flora and I Can’t Believe It’s Not Butter.

The US fund said the group of brands had a “firm foundation for future growth” despite sales struggling under the Anglo-Dutch company’s ownership.

The sale marks another step in Unilever’s effort to overhaul the business after fending off a £115bn takeover attempt from Kraft Heinz.

Unilever chief executive Paul Polman said: “In April of this year we set out our 2020 programme to accelerate sustainable value creation. After a long history in Unilever we decided the future of the spreads business would lie outside the group.

“The announcement today marks a further step in reshaping and sharpening our portfolio for long-term growth.

“The consideration recognises the market-leading brands and the improved momentum we have achieved.

“I am confident that, under KKR’s ownership, the spreads business with its iconic brands will be able to fulfil its full potential as well as societal responsibilities.”

The spreads business operates across 66 countries and had a turnover of £2.7bn, earnings of £601m and assets of €1.1bn (£973m) in 2016, according to Unilever.

The deal, which must win regulatory backing, is expected to be complete by the middle of next year, with Unilever pledging to return net cash from the sale to shareholders unless a “value-creating acquisition” emerges.

Shares in Unilever closed up more than one per cent on the London Stock Exchange.