Reckitt strikes deal worth up to £3.6bn to sell Cillit Bang business
Reckitt will keep a 30% stake in the essential home business after the sale, with up to 1.3 billion dollars (£968 million) deferred under the deal.
It will offload six factories, including a site in Derby, to Advent under the deal.
The firm will also book around 800 million dollars (£596 million) in costs for splitting out the essential home division from the rest of the business.
It expects to complete the deal by the end of the year.
Kris Licht, Reckitt chief executive, said: 'We are executing our strategic plan at pace.
'The divestment of Essential Home represents a significant step forward in unlocking the substantial value in our business.
'This moves Reckitt towards becoming a simpler, more effective world-class consumer health and hygiene company and it will enable us to focus on a core portfolio of high-growth, high-margin power brands.'
It put the essential home division, which accounts for about 14% of group net revenues, up for sale last summer as part of a major overhaul.
Mr Licht has been leading a plan to restructure Reckitt, unveiling aims last year to spin off its baby formula business, Mead Johnson, and sell the essential home division to focus on 'power brands', such as Durex condoms, Gaviscon antacid and Strepsils lozenges.
The essential home business delivered around £2 billion of net revenues in 2024 and it made underlying earnings of £486 million in the year to March.
Reckitt said the sale would help further boost shareholder returns, with it set to pay out a 2.2 billion dollar (£1.6 billion) special dividend to investors.
The group added it plans to offset the costs of spinning off the division under wider aims to cut costs across the firm.
Shares in Reckitt lifted 2% in morning trading on Friday.
Ranjan Sen, managing partner of Advent said: 'The carve-out represents a unique opportunity to create a focused, scaled platform of globally recognised home care brands that operate in attractive categories.
'We are confident we can build on the portfolio's strong foundations to drive operational excellence and unlock the brands' full potential.'
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
4 days ago
- Daily Mail
Demand for Durex in Europe and China boosts sales at consumer goods giant Reckitt
Sales of Durex condoms in Europe and China are boosting consumer goods giant Reckitt. Shares in the FTSE 100 firm, which also owns Dettol cleaner and Nurofen painkillers, soared 10 per cent, or 502p, to 5542p yesterday – a 17-month high. Reckitt hiked its revenue expectations after racking up sales of nearly £7billion in the first six months of 2025, and operating profit of £1.71billion, beating analyst expectations of £1.66billion. Sales were driven by a surge in demand in Europe and China, with its first non-latex condom achieving double-digit sales growth in France and Germany. It raised its sales growth expectations for this year to between 3 and 4 per cent from a previous forecast of 2 to 3 per cent. It comes after Reckitt last week agreed to sell its cleaning products unit including brands such as Cillit Bang and Air Wick to US private equity firm Advent International for £3.6billion. Reckitt, which will retain a 30 per cent stake, will refocus on its core brands, which also include Strepsils and Vanish.
Reuters
4 days ago
- Reuters
FTSE 100 notches record close on US-EU trade deal optimism, earnings boost
July 24 (Reuters) - Britain's FTSE 100 rose on Thursday to a record close, boosted by upbeat corporate results and optimism over a potential EU-U.S. trade agreement. The benchmark FTSE 100 (.FTSE), opens new tab closed up 0.9% at 9,138.37 points. The domestically oriented midcap FTSE 250 (.FTMC), opens new tab gained 0.6%. The personal care and grocery stores index (.FTNMX452010), opens new tab led sectoral gains, up 2.6%, boosted by Reckitt (RKT.L), opens new tab, up 9.9%, after the consumer goods company raised its annual revenue forecast. Healthcare stocks (.FTNMX201030), opens new tab rose 1.9% with AstraZeneca (AZN.L), opens new tab up 2.1% after the drugmaker's rare immune disorder drug succeeded in an advanced trial. GSK (GSK.L), opens new tab added 1.4% after the U.S. Food and Drug Administration on Wednesday extended its review of the drugmaker's blood cancer drug. Media stocks (.FTNMX403010), opens new tab advanced 2.3%, led by ITV (ITV.L), opens new tab, which rose 13.3% after the broadcaster's half-year results beat forecasts. Conversely, precious metal miners (.FTNMX551030), opens new tab fell 1.4%, tracking a drop in gold prices. Endeavour Mining (EDV.L), opens new tab fell 1.3%, and Fresnillo (FRES.L), opens new tab was down 2.1%. In company news, BT Group (BT.L), opens new tab advanced 10.4%, topping the FTSE 100 index, after the telecom firm named Patricia Cobian as its first female chief financial officer. Howden Joinery (HWDN.L), opens new tab soared 8.9% after reporting a rise in first-half profit. Vodafone (VOD.L), opens new tab gained 3.4% after reporting a 5.5% increase in organic service revenue in the first quarter. Airtel Africa (AAF.L), opens new tab soared 7.3% after posting higher quarterly results. Anglo American's (AAL.L), opens new tab copper and diamond production fell in the first half of the year. Shares of the miner edged 0.9% down. BP (BP.L), opens new tab will exit its planned green hydrogen production facility in Australia as it pivots back to oil and gas, a spokesperson said. Shares of the energy major were down 1.7%. Meanwhile, an EU spokesperson signalled that a U.S.-EU deal was within reach, which would result in broad 15% import tariffs on the 27-member bloc. Additionally, surveys showed British companies are struggling to grow and the job market continues to weaken, but inflation pressures are still lurking in the economy. A Reuters poll showed the Bank of England is expected to cut interest rates in August and November with steady economic growth anticipated. Britain and India also signed a free trade agreement.
Reuters
4 days ago
- Reuters
Reckitt lifts revenue outlook on strong Asia growth, shares surge
July 24 (Reuters) - Consumer goods company Reckitt (RKT.L), opens new tab raised its annual revenue forecast on Thursday after second-quarter net sales growth topped expectations, sending shares soaring, as strength in China and India offset weakness in North America and Europe. Shares jumped as much as 11% to their highest level since early 2024 and were among the biggest gainers on the pan-European STOXX 600 index (.STOXX), opens new tab. Reckitt, the maker of Durex condoms and Lysol cleaning products, is pivoting to focus on its 11 so-called "power brands" under CEO Kris Licht, as the sector is faced with weak demand and fierce competition. The company reported like-for-like quarterly net revenue growth of 1.9%, above the 1.7% forecast in a company-compiled consensus. It also announced a new 1 billion pounds share buyback over the next 12 months. Growth in North America and Europe lagged expectations, hit by a challenging consumer environment and the expected shelf reset of its flu medicine Mucinex due to reformulation. Licht said there was some stabilisation in those regions in the second quarter, but consumption remained "suppressed". "Even though consumption is a bit lower in our categories, we're still seeing some growth, and people are still spending. It's just much more measured," he said, referring to North America and Europe. But strong sales in China, India and good growth in Brazil, Colombia, Indonesia and Malaysia made up for weakness in developed markets. Chinese consumers were responding well to new innovation behind the Dettol brand, Licht said. Reckitt raised the like-for-like 2025 net revenue growth forecast for its core business to above 4%, from a 3% to 4% range previously. "A beat and raise is a rare occurrence in this market," said analysts at JPMorgan in a note. Reckitt now expects overall group like-for-like net revenue growth of 3% to 4% for the year, up from the previous 2% to 4%. The share price was last up 9%, heading for its biggest one-day percentage gain since November 2008. Last week, Reckitt sold a majority stake in its Essential Home business to Advent for $4.8 billion. It is also exploring options for its Mead Johnson unit, which faces several baby formula lawsuits in the U.S. The U.S. litigation may have some impact on timing of the eventual exit of Mead Johnson, Licht said. Essential Home and Mead Johnson, which are considered non-core, underperformed during the quarter. Reckitt posted operating profit of 1.71 billion pounds ($2.32 billion) for the six months ended June 30, beating analysts' average expectations of 1.66 billion pounds. Some investors worry Reckitt is more exposed than rivals to U.S. tariffs due to lower U.S. manufacturing capacity compared to Haleon (HLN.L), opens new tab and Unilever (ULVR.L), opens new tab. Once its new factory in the U.S. state of North Carolina becomes operational in 2027, the share of local U.S. sales could rise to 75% from 57%, Reckitt has previously said. Licht said he is considering further U.S. investments to "increase capacity and support innovation." ($1 = 0.7368 pounds)
