Unilever has approached GlaxoSmithKline a few potential acquisition of its shopper well being three way partnership with Pfizer for as a lot as £50bn in what might turn out to be one of many London market’s largest offers.
The buyer items group stated on Saturday that it “has approached GSK and Pfizer a few potential acquisition of the enterprise”. The formal bid was unsolicited. GSK declined to remark.
“GSK Consumer Healthcare is a pacesetter within the enticing shopper well being area and can be a powerful strategic match as Unilever continues to reshape its portfolio. There will be no certainty that any settlement can be reached,” Unilever added.
The Sunday Occasions, which first reported the bid, stated the maker of Dove cleaning soap and Magnum ice cream supplied about £50bn for the division late final 12 months, however was rebuffed.
Analysts have valued the enterprise at about £47bn to £48bn, suggesting the bid didn’t embody a major premium or financial savings from synergies between the 2 shopper corporations.
Unilever declined to touch upon whether or not it will return with a better bid.
GSK has been getting ready to spin off the division, a three way partnership with Pfizer which makes Panadol painkillers, Theraflu chilly and flu medication, and Otrivin decongestant. The brand new division can be led by insider Brian McNamara and its board is because of be chaired by Dave Lewis, the previous Tesco chief govt.
Activist traders together with US hedge fund Elliott Administration have put pressure on Emma Walmsley, GSK’s chief govt, to discover different choices — together with a sale — if it might generate larger returns for shareholders. Walmsley plans to make use of proceeds from the spin-off to bolster the pharma and medicines enterprise’ lacklustre pipeline.
Pfizer owns 32 per cent of the division, which GSK has stated it is going to checklist in London this 12 months, though personal fairness teams have additionally checked out a possible buy.
A Unilever buyout can be one of many largest ever on the London market, bringing collectively the FTSE’s third-largest firm with a division that, if impartial, can be in its high 20. It might be rivalled solely by Vodafone’s acquisition of Germany’s Mannesmann in 1999 and AB InBev’s buy of SABMiller in 2016.
The method got here as Unilever, already one of many world’s largest shopper items teams, seeks to resume momentum after a interval of tepid gross sales progress.
Its share worth has languished since chief govt Alan Jope took over in 2019, and top-10 investor Terry Smith this week attacked the company as “labouring beneath the burden of a administration which is obsessive about publicly displaying sustainability credentials on the expense of specializing in the basics of the enterprise”.
Different traders disputed that, however most agree the corporate should handle its underperformance. It agreed final 12 months to unload its tea division, which has been a drag on progress, for €4.5bn to non-public fairness group CVC, however has but to make a significant acquisition beneath Jope.
Unilever in 2018 agreed a deal to purchase GSK’s well being meals drinks enterprise, together with the Horlicks model, in India and different Asian markets for €3.3bn. It has additionally acquired a collection of small shopper well being manufacturers, together with Smarty Pants, Olly and Onnit dietary supplements and Liquid IV drinks mixes.