Companies eye purchase of Reckitt as it plans offload of home care brands

Private equity groups Advent International and Apollo Global are reportedly considering a potential buyout of the multinational consumer goods company Reckitt’s home care assets.

According to Bloomberg, the London-listed company is working with investment banking company Morgan Stanley to sell its brands, targeting a valuation of more than £6 billion (US$7.74 billion). The news outlet garnered information from “people familiar with the matter.”

Reckitt announced plans in July to divest its home care portfolio by the end of 2025. This portfolio includes Air Wick air fresheners and Cillit Bang cleaners. Last year, the portfolio achieved sales of approximately £1.9 billion (US$2.5 billion).

At the same time, the company was facing shareholder pressure to sell its US-based infant formula manufacturer, Mead Johnson Nutrition.

This can be attributed to an Illinois jury in March ordering Mead Johnson to pay US$60 million to a mother of a premature baby who died of an intestinal disease after being fed the company’s Enfamil Premature 24 baby formula. Multiple cases have been filed against baby formula makers and it is unclear how many are related to the Enfamil product.

Reckitt has been considering options for its litigation-hit Mead Johnson Nutrition business, with plans to refocus on its health care and hygiene sectors.

“Reckitt will move to a simpler and more effective organization with fewer management layers and reduced duplication to accelerate speed of decision making and improve efficiency,” the company shared previously.

The reorganization aims for a “sharper, simpler Reckitt” by shifting focus on its highest-margin brands in the consumer health and hygiene space, including Veet, Strepsils, Gaviscon, Nurofen, Dettol, Finish and Durex.

Other offloads

THG recently raised £95.4 million (US$124.5 million) in funding to demerge its technology arm, Ingenuity. The move comes after the e-commerce platform experienced financial losses.

Personal Care Insights reported that the company’s stock dropped significantly last month after the British e-commerce company missed earnings estimates. At that time, THG said it might spin off Ingenuity to help boost its bottom line. The stock has dropped over 90% since its IPO in 2020.