Unilever offered £50 billion for GSK’s consumer brands division

Unilever made an offer at the end of last year to acquire the consumer brands division of GlaxoSmithKline (GSK). The company confirmed this after earlier reports from the British newspaper The Times. Insiders reported that the offer of around 50 billion pounds (60 billion euros) was rejected. The board of directors of GSK and pharmaceutical company Pfizer, which has a minority interest in GSK, thought the offer was too low.

GSK's consumer business makes Aquafresh toothpaste and Panadol painkillers, among other products. GSK planned to self-manage the company this year. Analysts estimated the value of the branch at around 48 billion pounds. GSK is holding an investor day in March and the information that comes out may allow the valuation to be adjusted.

According to insiders, Unilever's offer would not have included a premium on top of the value. In addition, the cost benefits that the Unilever acquisition would bring were not taken into account. The advantages are usually also expressed at a higher price.

Whether there will still be talks after the rejection and whether Unilever wants to make a higher offer is unclear. Unilever did not wish to comment on the matter further. The company only said there is "no certainty" they will reach an agreement.

It was also not clear how Unilever wanted to pay for the acquisition. A large part would probably be delivered in Unilever shares. The question is how the current shareholder would react to this.