GSK Nixes £50B Unilever Offer For its Consumer Assets

GlaxoSmithKline (GSK) on Saturday said it had rejected a 50-billion-pound offer from Unilever for its consumer goods arm, saying it "fundamentally undervalued" the business and its future prospects and that it would stick to its plan of spinning off the unit.

Photo Insert: GSK House, Brentford, UK

Unilever confirmed the approach earlier on Saturday, saying the Glaxo unit would be a "strong strategic fit" as it continues to re-shape its portfolio spanning food, beauty and home care brands, Siddharth Cavale, Ludwig Burger and Mrinmay Dey reported for Reuters.

A deal of this size would be the biggest globally since the start of the pandemic if it goes through. It could also transform Unilever into a formidable beauty and personal care purveyor, taking on the likes of Estee Lauder and L'Oreal, while for GSK, it could bring much-needed relief from investor pressure that has been building over the past year.

GSK said it had received three bids from Unilever, the latest on Dec. 20 comprising 41.7 billion pounds in cash and 8.3 billion pounds in Unilever shares, which failed to reflect the intrinsic value of the business and its potential.

"The Board of GSK, therefore, remains focused on executing its proposed demerger of the Consumer Healthcare business ... on track to be achieved in mid-2022," the statement said, adding that it was confident the business would beat global market growth rates in the medium term.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic