The Anglo-Dutch company said the deal would include Alsa’s manufacturing unit in France.
Alsa, whose products include flan mixes and baking powder, was bought by Unilever in 2000.
Analyst Nico von Stackelberg of Liberum said he viewed the business as non-core and probably of lower growth for Unilever.
The proposal from Dr. Oetker, an unlisted German food manufacturer, comes as the Anglo-Dutch consumer goods giant is moving to streamline its business as shareholders mount pressure on the group to create better value.
Since the failed takeover bid by Kraft-Heinz (KHC.O) in 2017, Unilever has bought back shares, committed to a margin target, struck a deal to sell its shrinking margarine and spreads business and announced that it wants to end its dual-headed structure.
Reporting by Radhika Rukmangadhan and Rahul B in Bengaluru; Editing by Adrian Croft