Reckitt to sell homecare unit including Air Wick and Cillit Bang for $4.8bn

Irish Examiner

18-07-2025

Reckitt Benckiser agreed to sell most of its homecare business to private equity firm Advent International for an enterprise value of up to $4.8bn (€4.12bn) as the UK consumer goods company focuses on faster-growing operations.
Reckitt said it will retain a 30% stake in the business, whose brands include Air Wick air fresheners and Cillit Bang cleaners. The enterprise value includes up to about $1.3bn (€1.1bn) of contingent and deferred consideration, the company said on Friday.
Shares of Reckitt rose as much as 2.3% in early London trading before paring back some of the gains. The stock is up nearly 14% in the past 12 months
Chief executive Kris Licht last year announced plans to sell some of Reckitt's non-core homecare brands and review options for its infant formula business. The proposed sale was part of his strategy to streamline Reckitt and focus on faster growing parts of the business, after a difficult few years where consumer goods companies have had to contend with stretched consumer budgets and shoppers trading down to unbranded products.
Reckitt's homecare unit was boosted during the pandemic when demand for cleaners and disinfectants soared, but those benefits have diminished. The company now expects faster growth from consumer-health labels like Strepsils lozenges, Durex condoms and Mucinex cold remedies, while retaining better performing home-care brands like Lysol and Dettol.
Reckitt expects to pay a special dividend of $2.2bn (€1.89bn) to shareholders following the completion of the deal, which is expected by December 31. It will also incur one-time costs of about $800m related to the transaction.
Barclays and Citigroup advised Advent, while Goldman Sachs and Morgan Stanley were lead financial advisers to Reckitt.
The valuation for the businesses being sold is below the initial $8bn Reckitt sought when it put the brands up for sale last year. Reckitt's sale process was hit with anxiety around US tariffs, which has cast uncertainty over the the outlook for global businesses with international manufacturing. The deal has been structured so that the greater risk in the current market environment is shared between the two parties, with Reckitt retaining a stake and needing to hit certain milestones to generate the full payout.
With a lot resting on a successful execution of a deal for the homecare assets this outcome should still 'be a boost to management's credibility,' according to James Edwardes Jones and Wassachon Udomsilpa, RBC analysts. They said it will enable investors to focus more closely on the core Reckitt business in a note to clients.
The deal will be financed with about $2.3bn of term loans, denominated in euro and dollars, underwritten by a group of banks and it's expected to be syndicated to institutional investors post summer.
In March, Reckitt said it expects modest sales growth this year as it reshapes the business — a move it said would deliver a significantly stronger performance starting in 2026.
The infant formula unit, created by the $17bn acquisition of Mead Johnson in 2017, remains a sore point for Reckitt. Licht acknowledged last year that the unit, which has been hit by legal woes in the US, hasn't always been a natural fit in the group.
Bloomberg