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’50bn Pound Deal’: Unilever Shows Intertest in Buying GSK’s Consumer Goods Unit

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LAHORE MIRROR (Monitoring Desk)– Consumer goods giant Unilever said it had approached Glaxosmithkline about buying the pharmaceutical group’s consumer goods arm, after a newspaper reported that a 50 billion-pound ($68.4 billion) bid it made had been rebuffed.

Unilever, which has been under fire from some investors over its underperforming share price, confirmed the approach about a potential acquisition of the business in a statement on Saturday.

“GSK Consumer Healthcare is a leader in the attractive consumer health space and would be a strong strategic fit as Unilever continues to re-shape its portfolio,” it said.

“There can be no certainty that any agreement will be reached.”

GSK declined to comment on the approach. The group’s consumer goods business is due to be spun out into a separate listing in the middle of this year.

Earlier, Britain’s Sunday Times said the Unilever bid for the business made late last year was worth roughly 50 billion pounds, and had been rejected as too low by GSK and Pfizer, which owns a minority stake in the division.

The approach by Unilever, which owns brands such as Dove soap and Marmite, for Glaxo’s portfolio of household brands including Panadol painkillers and Sensodyne toothpaste was understood to have been unsolicited, the report added.

The bid did not include any takeover premium or recognition of synergies, the newspaper said, adding that it was not clear whether the group would make a higher offer.

Unilever declined to comment on whether it would return with a higher bid. Brokerage Jefferies last year put a valuation for the whole consumer unit at 45 billion pounds.

The offer comes at a time Unilever’s Chief Executive Alan Jope is under pressure to turn around its languishing stock price as it struggles to compete in the face of high inflationary costs, especially in emerging markets, its biggest source of revenue.

The FTSE-listed conglomerate’s stock has fallen 10% over the past year compared with P&G’s 18% rise and Reckitt’s 1.4% decline, despite a pandemic-driven boost in shopping for groceries and household goods that has benefited all three companies.

British fund manager Terry Smith, whose Fundsmith vehicle is a top-10 Unilever investor, this week criticized the group for promoting sustainability credentials at the expense of performance.

Smith was not immediately available to comment.

SOURCE: REUTERS