Reckitt Benckiser Reviews Possible Food Division Sell Off
04 Apr 2017 --- British multinational consumer goods company Reckitt Benckiser is considering selling off its food division at an estimated US$2 billion as it prepares to acquire infant formula maker Mead Johnson Nutrition.
In a statement Reckitt Benckiser, which owns well-known brands like Nurofen and Durex condoms, says it has began a strategic review of the division where it it considering all options for the “non-core” business.
This is the similar manoeuvre as Unilever pulled recently when it announced a strategic review just after defending a takeover approach from Kraft Heinz Co, with one of its options to sell off its spreads business.
The food division of Reckitt Benckiser includes French’s mustard, ketchup and Frank’s Red Hot Sauces.
Some reports claim offloading the food division is a way for the company to pacify shareholders as it prepares the US$17.9 billion acquisition of Mead Johnson.
Reckitt Benckiser Group plc has already signed a merger agreement with Mead Johnson Nutrition Company under which Mead Johnson shareholders will receive US$90 per share in cash.
The acquisition will take Reckitt Benckiser into a global market leadership in consumer health.
“The addition of the Enfa family of brands, the world’s leading franchise in infant and children’s nutrition is a natural extension to RB’s consumer health portfolio of power brands which are already trusted by millions of mothers, reinforcing the importance of health and hygiene for their families,” says a statement.
“Mead Johnson’s geographic footprint will significantly strengthen our position in developing markets, which account for approximately 40% of the combined group’s sales.”
“RB’s deep understanding of consumer needs and its expertise in scaling global brands will deliver significant growth for the Mead Johnson portfolio,” it continues.
The boards of RB and Mead Johnson have both unanimously approved the transaction, however the transaction is also subject to regulatory approvals.
