Unilever has defended its plan to acquire GlaxoSmithKline’s consumer healthcare division following analyst skepticism over its £50bn bid.
The maker of Dove soap, Hellmann’s mayonnaise and Domestos bleach, today said GSK Consumer Healthcare was a “strong strategic fit” and the proposed purchase was in line with Unilever’s plans to increase its presence in the fields of health, beauty and hygiene.
“The acquisition would create scale and a platform for growth for the combined portfolio in the United States, China and India, with new opportunities in other emerging markets,” he said, adding that she would sell “inherently lower growth brands and companies”.
Unilever’s approaches to GSK Consumer Healthcare, which makes Aquafresh toothpaste and Panadol painkillers, have so far been pushed back, but it hopes to continue talks, according to people familiar with the matter.
The update came as analysts expressed skepticism over the potential deal.
“We see little strategic, operational or financial rationale for such a deal,” RBC Capital Markets analyst James Edwardes-Jones said.
Bernstein analyst Bruno Monteyne said the deal would result in “£10bn of shareholder value destruction”.
Unilever said that after any acquisition “the company would aim for a return to current debt levels in the short to medium term.”
The group said it would present a “major initiative to improve our performance” this month, including structural changes.
Unilever shares fell 4.8% in early trades in London. GSK shares rose 5.4%.
