Unilever wants to take over the consumer goods division of the chemical company.
(Photo: AP)
new York According to media reports, a multi-billion dollar poker game has broken out around the consumer goods division of the pharmaceutical giant GlaxoSmithKline. The consumer goods group Unilever has, according to its own statements, kept an eye on the division and, according to the finance agency Bloomberg, is considering increasing its last £50 billion (60 billion euro) purchase offer. GlaxoSmithkline and the pharmaceutical company Pfizer, which has a minority stake in the division, insist on an offer of £60 billion, the Financial Times reported on Sunday. In the background are investors who insist on a higher price or alternatively an IPO for the division. A transaction of this magnitude would be the largest in the world since the beginning of the coronavirus pandemic.
Unilever has spoken to banks about financing a possible higher offer, Bloomberg reported, citing people familiar with the matter. After taking over the division, Unilever could resell parts of it to financial investors and other buyers and also use the proceeds to finance the takeover. Initially, no comments were available from either company.
Unilever had encountered resistance at GlaxoSmithKline with a billion-dollar bid for the division. With the offer of around 50 billion pounds, the division and its prospects would be fundamentally undervalued, GlaxoSmithkline said on Saturday. The preparations for the IPO planned for the middle of the year would continue. Unilever had confirmed the offer and left open the question of a possible increase.
The US pharmaceutical group Pfizer has held a 32 percent stake in the consumer goods division of the British company GlaxoSmithKline since the two companies merged their respective businesses in 2019. According to a report in the Sunday Times, Pfizer also rejected the offer from the British-Dutch Unilever as too low. With brands such as Sensodyne toothpaste, the painkiller Voltaren and Otriven nasal spray, the division recently earned £10 billion and thus contributed almost a third of GlaxoSmithkline’s £34 billion annual turnover.
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Activist investor also calls for spin-off
According to GlaxoSmithKline, it received three offers from Unilever, the last of which was on December 20. This included £41.7 billion (€50 billion) in cash and £8.3 billion (€10 billion) in Unilever shares. Unilever said GSK Consumer Healthcare is a leader in consumer healthcare and would therefore be a good strategic fit with Unilever. The group, known for Langnese ice cream, Knorr sauces or signal toothpaste, left open whether it would make another attempt: “There can be no certainty that an agreement will come about.”
Last year, activist investor Elliott called for the consumer health division to be sold. Elliott had calculated that if GlaxoSmithkline divested itself of it completely, it could boost the share price by 45 percent. The US pharmaceutical company Johnson & Johnson (J&J) is also splitting off its business with over-the-counter medicines and other health products. There is currently a wave of splits and splits around the world. They follow the theory that conglomerates are often valued lower in the stock market than their individual parts.
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