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 may develop into one of many London market’s largest offers.
The patron 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 frontrunner within the enticing shopper well being house and could be a robust strategic match as Unilever continues to reshape its portfolio. There will be no certainty that any settlement can be reached,” Unilever added.
The Sunday Instances, which first reported the bid, stated the maker of Dove cleaning soap and Magnum ice cream provided about £50bn for the division late final yr, however was rebuffed.
Analysts have valued the enterprise at about £47bn to £48bn, suggesting the bid didn’t embody a big premium or financial savings from synergies between the 2 shopper corporations.
Unilever declined to touch upon whether or not it might return with the next bid.
GSK has been making ready to spin off the division, a three way partnership with Pfizer which makes Panadol painkillers, Theraflu chilly and flu drugs, and Otrivin decongestant. The brand new division could be led by insider Brian McNamara and its board is because of be chaired by Dave Lewis, the previous Tesco chief government.
Activist traders together with US hedge fund Elliott Administration have put pressure on Emma Walmsley, GSK’s chief government, to discover different choices — together with a sale — if it could actually 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’s going to record in London this yr, though non-public fairness teams have additionally checked out a possible buy.
A Unilever buyout could be one of many largest ever on the London market, bringing collectively the FTSE’s third-largest firm with a division that, if impartial, could be in its prime 20. It could 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 development.
Its share worth has languished since chief government Alan Jope took over in 2019, and top-10 investor Terry Smith this week attacked the company as “labouring beneath the load 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 deal with its underperformance. It agreed final yr to dump its tea division, which has been a drag on development, for €4.5bn to non-public fairness group CVC, however has but to make a serious 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.