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Reckitt Benckiser initiates sale of food unit: Reuters
Posted on Friday, 02 June 2017 11:12
UK consumer goods giant Reckitt Benckiser has begun the process of selling its North American food division, according to Reuters.
Citing sources with knowledge of the matter, the news provider said information packages have been distributed to major players in the sector.
A number of parties have been named as potential suitors, including McCormick, Conagra Brands, Unilever, Hormel Foods, Pinnacle Foods and Campbell Soup.
According to the sources, who did not wish to be identified as the matter is private, a sale of the business could be worth in excess of USD 3.00 billion and proceeds would be used to lower its debt level following the USD 16.60 billion acquisition of Mead Johnson announced in February.
That transaction, which will also involve the assumption of debts totalling USD 1.20 billion, is subject to the green light from shareholders and regulators and is slated to close in the third quarter of this year.
The people noted that private equity investors are not among the prospective acquirors as there is sufficient interest from industry players, while one of the sources added that first round bids are expected within the next few weeks.
None of the parties involved have commented on the report.
A sale of the food unit, which includes mustard manufacturer French’s, was first mooted back in early April, when Reckitt Benckiser said it was reviewing strategic options for the business.
At the time Reuters noted the group’s increasing focus on consumer health products such as Nurofen tablets, Durex condoms and Strepsils throat lozenges could be one factor behind the decision to look at the unit as a potential candidate for divestment.
The company’s most recent sale completed in October 2015, when it offloaded Russian pharmaceuticals wholesaler Medkom-MP for an undisclosed sum to an unknown buyer.
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