UNITED KINGDOM – Unilever has pledged to grow its health, beauty, and hygiene business while selling slower-growing operations after investors dumped its stock following its failed £50 billion (US$68.19 billion) bid for GlaxoSmithKline’s consumer products division.
GSK turned down three Unilever bids for the consumer products division it wants to spin off, the most recent of which was worth US$68.19 billion.
The pharmaceutical company has stated that the offer “fundamentally undervalued” the company, which owns brands such as Panadol pain reliever and Sensodyne toothpaste.
According to Reuters, GSK, led by CEO Emma Walmsley, has hired Goldman Sachs and Citigroup to review Unilever’s approach, but it will not engage in talks unless Unilever increases its offer.
Unilever, the owner of brands ranging from Dove soap to Marmite, has been under pressure in recent months under the leadership of Alan Jope, the company’s CEO.
Before the bids were revealed, its share price was nearly a quarter lower than its all-time high for 2019.
GSK intends to spin off its consumer healthcare business by the middle of the year, with former Tesco CEO Sir Dave Lewis set to chair the board. According to some analysts, GSK could seek up to £60 billion (US$81.83 billion) for a takeover.
Unilever has said that GSK Consumer Healthcare would be a “strong strategic fit.” It emphasized GSK’s oral care brands, including Aquafresh toothpaste, as well as its vitamins, minerals, and supplements brands, including Centrum, and over-the-counter medicines.
Jope stated that the company would be “a very attractive option” for Unilever, but that it would not be “the only option.”
He emphasized that rather than incurring additional debt, Unilever would fund the health, beauty, and hygiene push by selling slower-growing businesses.
The company stated that it would return to current debt levels relative to its size “in the short to medium term.”
Jope’s remarks came as Unilever rushed out a strategy update focused on investing in “sustainable market growth” and leveraging its already strong presence in emerging markets, where citizens are expected to consume more consumer goods as they become wealthier.
It plans to update investors later this month on a new operating structure that it hopes will improve its performance.
Jope, on the other hand, insisted that these changes would be aimed at making the company easier to manage rather than cutting costs through job losses.
Meanwhile, GlaxoSmithKline (GSK Egypt) has announced that its board of directors has approved the sale of transferred consumer healthcare and intangible assets to GSK Consumer Healthcare Egypt Limited.
According to a statement filed with the Egyptian Exchange, the sale transaction will be carried out in accordance with the fair value (FV) study of the aforementioned assets.
As a result, the board decided to call an extraordinary general meeting (EGM) to discuss the sale of GSK Consumer Healthcare Egypt Limited’s transferred consumer healthcare assets (excluding buildings and machines) and intangible assets.
Furthermore, the board agreed to appoint a new managing director for the company and to determine who has the authority to sign on its behalf.
The board also agreed to appoint GlaxoSmithKline representatives to Amoun Pharmaceutical Industries Company’s board of directors.
Liked this article? Sign up to receive our regular email newsletters, focused on Africa and World’s healthcare industry, directly into your inbox. SUBSCRIBE HERE