January 24, 2022

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Unilever says offer made for GSK’s £50bn consumer unit

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Unilever has approached GlaxoSmithKline about a potential acquisition of its consumer health joint venture with Pfizer for as much as £50bn in what could become one of the London market’s largest deals.

The consumer goods group said on Saturday that it “has approached GSK and Pfizer about a potential acquisition of the business”. The formal bid was unsolicited. GSK declined to comment.

“GSK Consumer Healthcare is a leader in the attractive consumer health space and would be a strong strategic fit as Unilever continues to reshape its portfolio. There can be no certainty that any agreement will be reached,” Unilever added.

The Sunday Times, which first reported the bid, said the maker of Dove soap and Magnum ice cream offered about £50bn for the division late last year, but was rebuffed.

Analysts have valued the business at about £47bn to £48bn, suggesting the bid did not include a significant premium or savings from synergies between the two consumer companies.

Unilever declined to comment on whether it would return with a higher bid.

GSK has been preparing to spin off the division, a joint venture with Pfizer which makes Panadol painkillers, Theraflu cold and flu medicine, and Otrivin decongestant. The new division would be led by insider Brian McNamara and its board is due to be chaired by Dave Lewis, the former Tesco chief executive.

Activist investors including US hedge fund Elliott Management have put pressure on Emma Walmsley, GSK’s chief executive, to explore other options — including a sale — if it can generate greater returns for shareholders. Walmsley plans to use proceeds from the spin-off to bolster the pharma and drugs business’ lacklustre pipeline.

Pfizer owns 32 per cent of the division, which GSK has said it will list in London this year, although private equity groups have also looked at a potential purchase.

A Unilever buyout would be one of the largest ever on the London market, bringing together the FTSE’s…



2022-01-15 07:11:55

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