Unilever has approached GlaxoSmithKline a couple of potential acquisition of its client well being three way partnership with Pfizer for as a lot as £50bn in what may grow 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 couple of potential acquisition of the enterprise”. The formal bid was unsolicited. GSK declined to remark.
“GSK Shopper Healthcare is a frontrunner within the enticing client well being area and can be a powerful strategic match as Unilever continues to reshape its portfolio. There might be no certainty that any settlement will likely be reached,” Unilever added.
The Sunday Occasions, which first reported the bid, stated the maker of Dove cleaning soap and Magnum ice cream provided 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 big premium or financial savings from synergies between the 2 client corporations.
Unilever declined to touch upon whether or not it could return with the next 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 drugs, 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 government.
Activist traders together with US hedge fund Elliott Administration have put strain on Emma Walmsley, GSK’s chief government, to discover different choices — together with a sale — if it might generate better 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 non-public 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 unbiased, can be in its prime 20. It will be rivalled solely by Vodafone’s acquisition of Germany’s Mannesmann in 1999 and AB InBev’s buy of SABMiller in 2016.
The strategy got here as Unilever, already one of many world’s largest client items teams, seeks to resume momentum after a interval of tepid gross sales development.
Its share value has languished since chief government Alan Jope took over in 2019, and top-10 investor Terry Smith this week attacked the corporate 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 development, for €4.5bn to personal 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 sequence of small client well being manufacturers, together with Smarty Pants, Olly and Onnit dietary supplements and Liquid IV drinks mixes.