The Ben & Jerry’s Dispute: What It Teaches About Legal Agreements That Don’t Survive Success

By Lora Witt

Every so often, a corporate dispute escapes the trade press and lands squarely in the public consciousness. The ongoing tension between Ben & Jerry’s and its parent company, Unilever, is one of those moments. It has ice cream, politics, moral purpose, multinational power and, crucially, a very British legal lesson hiding beneath an American accent.

On the surface, this looks like a culture war. Dig a little deeper and it is something far more familiar to anyone involved in M&A: an agreement that made perfect sense at the time of signing, slowly eroded by a changing business environment, shifting power dynamics and a buyer who decided the spirit of the deal was optional.

The uncomfortable truth is that most founders believe their protections will be honoured forever. Most acquirers believe they will not.

The deal that tried to future-proof values

When Unilever acquired Ben & Jerry’s in 2000, it was not a conventional takeover. Ben & Jerry’s was not just a business; it was a values-led brand with a long history of social and political activism. The founders were deeply concerned that being absorbed by a multinational would dilute what made the company distinctive.

So they did something unusual. They negotiated contractual protections designed to outlive their own involvement. Central to this was the creation of an independent board tasked with protecting Ben & Jerry’s social mission, even after acquisition. This board was meant to operate at arm’s length from Unilever, with authority over the brand’s values, public positions and ethical stance.

At the time, this looked enlightened. A large corporate buyer acknowledging that not everything of value fits neatly into EBITDA. A founder-led brand protecting its soul while gaining the scale and resources of a global group. Advisers congratulated themselves. Everyone went home happy.

• For a while, it worked.

• Then the world changed.

When environments shift faster than agreements

The business environment in 2000 was not the business environment of the 2020s. Political polarisation intensified. Social media amplified brand activism. Corporate silence became a statement in itself. What once felt like harmless idealism started to carry reputational and commercial risk.

At the same time, Unilever itself evolved. Leadership changed. Strategy shifted. Brands were reviewed more ruthlessly. Performance expectations tightened. And suddenly, the idea of a semi-autonomous subsidiary publicly taking political positions that conflicted with the parent company’s geopolitical or commercial interests felt less charming and more inconvenient.

This is where many M&A agreements quietly start to fail.

Not because the clauses were badly drafted, but because they assumed goodwill would outlast incentives.

The independent board at Ben & Jerry’s existed on paper. But power, in large organisations, rarely resides where documents say it does. It resides where budgets are set, executives are appointed and careers are decided. Over time, the distinction between formal independence and practical dependence became increasingly strained.

From Ben & Jerry’s perspective, Unilever was undermining the very protections it had agreed to. From Unilever’s perspective, it was exercising legitimate ownership rights over a subsidiary that had become strategically awkward.

Both positions are understandable. That is precisely the problem.

The illusion of permanent alignment

Founders often negotiate protections based on today’s buyer, today’s leadership team and today’s values. They assume continuity where none is guaranteed. They forget that companies do not have personalities; people do. And people move on.

In the Ben & Jerry’s case, the agreement assumed that Unilever would continue to tolerate a level of independence that might one day conflict with its broader interests.

That tolerance was never guaranteed. It was merely assumed.

This is not unique to global brands. The same mistake appears repeatedly in UK SME transactions, albeit with less ice cream and fewer headlines.

Founders negotiate reserved matters, veto rights, independent boards, brand protections and “mission locks”, believing these will endure regardless of scale, market pressure or ownership changes. Buyers agree, believing they will find ways to manage around them if necessary.

Both sides are, in effect, kicking the can down the road.

Governance structures only work if power supports them

One of the most striking lessons from the Ben & Jerry’s dispute is the gap between governance theory and governance reality.

An independent board is only independent if:• it controls its own appointments• it cannot be marginalised financially• its decisions have real consequences

Once those conditions weaken, independence becomes ceremonial.

In many acquisitions, boards and committees are created to reassure sellers, regulators or the public. Over time, they are quietly hollowed out. Reporting lines change. Decision-making shifts “temporarily”. Strategic overrides become routine. None of this technically breaches the agreement. It simply renders it irrelevant.

This is how buyers undermine protections without ever tearing up the contract.

In the Ben & Jerry’s situation, accusations emerged that Unilever sought to influence or constrain the independent board’s ability to act, particularly where public statements or geopolitical positions were concerned. Whether one agrees with Ben & Jerry’s stance or not is beside the point. The structural lesson is clear: independence without enforcement is fragile.

Why courts are a blunt instrument

Disputes like this often end up in court because the agreement exists, but the operating reality has drifted too far to be resolved internally. Litigation becomes a proxy for a deeper failure of alignment.

Courts, however, are poor venues for resolving cultural or philosophical disagreements. They interpret words, not intentions. They assess breaches, not power imbalances. By the time lawyers are arguing about governance clauses, the relationship is already broken.

This is another trap founders fall into. They assume that because something is written down, it is enforceable in a meaningful way. In practice, enforcement is expensive, slow and reputationally damaging. Large acquirers know this. Smaller sellers often do not.

The existence of a legal remedy does not mean it is a practical one.

The Magnum problem: when the parent brand takes centre stage

One of the ironies often pointed out in commentary is that Unilever is perfectly comfortable with strong, commercially driven brands like Magnum operating at scale. The tension arises when brand strength is tied to activism rather than indulgence.

This highlights a subtle but important issue in M&A: buyers are often happy with differentiation until it creates friction. The moment a subsidiary’s distinctiveness complicates group strategy, tolerance erodes.

Founders sometimes assume that because a buyer values differentiation today, it will protect it tomorrow. In reality, differentiation is only protected while it aligns with the parent’s risk appetite and commercial priorities.

When it doesn’t, agreements are tested.

The real lesson for founders and boards

The Ben & Jerry’s dispute is not about ice cream or politics. It is about durability.

Agreements are negotiated at a moment in time. Businesses operate across decades. If protections are to survive, they must be designed with deterioration in mind.

This means asking uncomfortable questions upfront:• What happens if leadership changes?• What happens if the parent’s strategy shifts?• What happens if the brand becomes inconvenient?• Who really holds power when interests diverge?

It also means accepting that some things cannot be fully protected through contracts alone. Cultural alignment matters. Incentives matter. Exit mechanisms matter.

In some cases, the only true protection is structural separation, staged exits, or retaining leverage that cannot be easily neutralised.

UK SME relevance: smaller scale, same mistakes

While Ben & Jerry’s is a global case study, the same dynamics play out daily in UK SME deals.

Founders negotiate minority protections, board seats and vetoes believing they will preserve autonomy. Buyers agree, confident they can “manage” them later. When growth slows or priorities change, tensions emerge. The documents remain. The spirit disappears.

The difference is that UK SME disputes rarely make the news. They simply result in broken relationships, stalled earn-outs and quietly disappointing outcomes.

The lesson is the same at every scale: agreements must be built to survive not just success, but inconvenience.

How Lexis Capital Group can assist

Lexis Capital Group advises founders and acquirers on transactions where long-term alignment, governance and durability genuinely matter.

We help clients stress-test agreements against future scenarios, not just current intentions. This includes assessing whether governance structures will retain real power as businesses scale, ownership evolves and leadership changes.

Rather than relying solely on legal protections, we focus on incentive alignment, control mechanisms and exit options that remain effective when goodwill fades. Where independence, mission or brand integrity is critical, we help structure deals that acknowledge how power actually works, not how it is described in documents.

Lexis Capital Group is particularly suited to transactions where culture, values or strategic autonomy are central to value. We do not assume agreements will be honoured simply because they are signed. We help ensure they are built to survive the world changing around them.