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RB. Reckitt Benckiser Group Plc

6,498.00
0.00 (0.00%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Reckitt Benckiser Group Plc LSE:RB. London Ordinary Share GB00B24CGK77 ORD 10P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 6,498.00 6,502.00 6,506.00 0.00 00:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

French's Mustard on the Block Amid Reckitt Review -- 2nd Update

03/04/2017 12:45pm

Dow Jones News


Reckitt Benckiser (LSE:RB.)
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By Denise Roland 

French's mustard is up for sale.

Reckitt Benckiser Group PLC, the British owner of America's best-selling mustard, as well as Durex condoms and Lysol, said it had started a strategic review of its food business. The company is considering all options for the unit as it seeks to close its $16.6 billion takeover of baby-food maker Mead Johnson Nutrition Co.

The French's unit, which also includes Frank's RedHot pepper sauces and Cattlemen's barbecue sauces, generated GBP411 million ($513.4 million) of the company's overall revenue of GBP9.89 billion in 2016. Reckitt didn't provide further detail except to say the unit was no longer considered core.

Bankers and analysts estimated that the food unit could be worth $2.5 billion to $4 billion.

The move comes as Unilever PLC is the middle of its own strategic review of its portfolio, after snubbing a $143 billion bid by Kraft Heinz Co.

Both reviews come as consumer-goods giants re-evaluate their slower-growing packaged-food businesses and increasingly move toward higher-margin health and household goods. Investors for years have been encouraging Unilever to sell underperforming businesses such as its spreads unit, which includes margarines like Flora and Blue Band.

Reckitt's acquisition of Mead Johnson stands to nearly double the size of its consumer-health business and will push the Slough, England, company deeper into emerging markets. Reckitt Chief Executive Rakesh Kapoor lost out to Bayer AG in a bidding war for Merck & Co.'s consumer business in 2014 and since had been seeking a major acquisition.

Reckitt already has financing lined up for the Mead Johnson purchase and doesn't see it as a primary motivation for selling French's, a person familiar with the situation said.

"Its main value would be as a sale to another food company," the person said, noting that its value to a private-equity buyer would be limited due to Reckitt's lean management of the business.

French's is already managed separately from the rest of Reckitt Benckiser's business, which largely focuses on cleaning products, over-the-counter remedies and brands such as K-Y lubricants and Veet hair-removal cream.

This is a busy time for shopping around a food business: France's Danone SA last week put its Stonyfield organic yogurt unit up for sale, seeking to clear the biggest antitrust hurdle to its $10.4 billion acquisition of WhiteWave Foods Co.

On Friday, Reckitt disclosed in its annual report that the board cut Mr. Kapoor's pay last year after a scandal at the company's South Korean business, in which scores of people were killed and hundreds left with permanent lung damage by a humidifier disinfectant between 2001 and 2011.

Mr. Kapoor received total pay of GBP14.6 million last year, compared with GBP25.5 million in 2015, a figure that made him one of the highest-paid bosses in the FTSE 100 that year. His 2015 pay package stoked a rebellion among some shareholders, with 18% of investors voting against last year's pay policy.

Reckitt's remuneration committee said Mr. Kapoor would have been entitled to a further GBP14 million in bonus and share rewards had the committee not decided to "exercise discretion" to curb his pay.

Ben Dummett and Ian Walker contributed to this article.

Write to Denise Roland at Denise.Roland@wsj.com

 

(END) Dow Jones Newswires

April 03, 2017 07:30 ET (11:30 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

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