17th Jan 2022 07:48
(Alliance News) - Unilever PLC on Monday confirmed that it has an interest in acquiring the Consumer Healthcare business of GlaxoSmithKline PLC, believing that the unit would a be a "strong strategic fit" for the consumer goods maker's objectives.
On Saturday, Glaxo confirmed that it had received three bids for its Consumer health arm from Unilever, the latest being for GBP50 billion in cash and shares.
The business was formed in August 2019 as a joint venture with Pfizer Inc, which holds a 32% interest, while GSK holds the remaining 68%.
All three proposals were rejected by the Brentford-based pharmaceutical group, on the grounds that they all undervalued the business and its future prospects.
Unilever said that its interest in GSK's Consumer Health business follows an extensive process reviewing how the group can reposition its portfolio into higher growth categories.
On conclusion, Unilever found that it should turn its direction towards the Health, Beauty and Hygiene categories, which are expected to offer higher rates of market growth, and new opportunities to drive growth through investment.
The group also concluded that major acquisitions should come with the accelerated divestment of lower growth brands and businesses.
Specifically, Unilever said it considers Glaxo's Consumer Healthcare business to be an attractive acquisition target for the group, with 45% of the business being in Oral Care and Vitamins, Minerals & Supplements - categories in which Unilever already has a presence.
"The acquisition would create scale and a growth platform for the combined portfolio in the US, China, and India, with further opportunities in other emerging markets," the company stated.
Looking ahead, later in January Unilever will announces a major initiative to improve its performance, including the restructuring of its current operating model to foster higher efficiency.
Unilever will post an update on its fourth quarter and annual performance on February 10.
By Dayo Laniyan; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.
Related Shares:
UnileverGlaxosmithkline