Reckitt Benckiser mulls sale of baby-food business as focus on faster-growing categories intensifies

UK – British consumer goods giant Reckitt & Benckiser is considering options for its infant nutrition business including a potential sale, Bloomberg News has reported citing people familiar with the matter. 

The British consumer goods giant, whose brands include Enfamil formula, is reviewing its baby-food business globally and has been informally weighing buyer interest in the operations, the report said.  

According to the report, the deliberations are at an early stage and the London-listed firm could decide to keep the division.  

Reuters had reported in 2020 that the company was preparing to sell some non-core brands and was seeking out private equity bidders. 

Last year, Reckitt sold its baby formula business in China to investment firm Primavera Capital Group. 

The UK-based consumer-goods group said the transaction gives the assets sold “an implied enterprise value” of US$2.2bn. Reckitt is to keep an 8% stake in the business. 

Reckitt acquired the assets as part of its 2017 takeover of US-based infant-formula producer Mead Johnson. 

ADVERT

Back in January, Reckitt Benckiser sought to allay the concerns of its army of sales agents in India about unfair pricing, saying it had taken steps to ensure a level playing field for distributors, a letter seen by Reuters showed. 

The assurance followed a Reuters story in November that revealed sales agents of companies including Reckitt, Unilever, and Colgate were angry that mom-and-pop stores – known as kiranas in India – increasingly ordered from Indian retailer Reliance’s mobile app because they could get lower prices. 

In a letter dated Dec. 20 to a key trade group of 400,000 consumer goods sales agents, Reckitt said it had taken steps to ensure “equitable play” for all its business partners as it seeks to resolve their concerns. 
 
During the same month, Reckitt Benckiser announced that it has agreed to sell its E45 skincare brand to Swedish pharmaceuticals group Karo Pharma for £200m (US$270m). 

ADVERT

The sale is so far the latest disposal by the UK consumer group as it seeks to focus on higher-growth product areas.  

The proposed sale of the brand would be another step forward in its plan to “manage its portfolio for higher growth”, the UK-based group said on Friday.  

The range, aimed at consumers suffering from dry and itchy skin, generated combined net sales of £43m (US$58m) as of December 2020.  

The disposal comes as chief executive Laxman Narasimhan, who took over two years ago, seeks to focus Reckitt’s resources on faster-growing categories such as vitamins, sexual health, and specialized nutrition. 

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro industry. SUBSCRIBE HERE

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.