GSK Consumer Healthcare Business Not Worth Than £50bn—Unilever

By Dipo Olowookere

Unilever Plc has said it will not increase its £50 billion bid for the acquisition of GSK Consumer Healthcare business owned by GlaxoSmithKline, which was earlier rejected by the company.

In a statement issued last Saturday, GSK confirmed that it “received three unsolicited, conditional and non-binding proposals from Unilever” for the acquisition of its consumer healthcare arm, which is jointly owned by GSK and Pfizer, with GSK holding a majority controlling interest of 68 per cent and Pfizer 32 per cent.

According to GSK, the acquisition value of £50 billion comprising £41.7 billion in cash and £8.3 billion in Unilever shares was below the true value of the business.

The offer was rejected, according to the company, because the consumer healthcare business was “fundamentally undervalued” as the business has great “future prospects”, which was not factored into the proposals.

“The board of GSK is strongly focused on maximising value for GSK shareholders and has carefully evaluated each Unilever proposal.

“In doing so, the board and its advisers assessed the proposals relative to the financial planning assessments completed to support the proposed demerger of the business in mid-2022, including the sales growth outlook,” a part of the statement noted.

But reacting to the rejection in a statement on Wednesday, Unilever said it does not feel that the value of the GSK consumer business is worth more than its £50 billion valuations and because of that, it would not increase it.

“We note the recently shared financial assumptions from the current owners of GSK Consumer Healthcare and have determined that it does not change our view on fundamental value,” the statement said.

Unilever said, “Accordingly, we will not increase our offer above £50 billion,” noting that it will continue to maintain “strict financial discipline to ensure that acquisitions create value for our shareholders.”

“Unilever also reiterates its commitment to continuing to improve the performance of its existing portfolio through its ongoing focus on operational excellence, its upcoming reorganisation and by rotating the portfolio to higher growth categories,” it added.

Unilever and GSK both have subsidiaries in Nigeria and are also listed on the local stock exchange.

Business Post reports that on Wednesday, shares of Unilever Nigeria closed flat N13.20, while GSK rose by 0.84 per cent to N6.00 from N5.95.