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Unilever will no longer have headquarters in Rotterdam
Unilever will no longer have headquarters in Rotterdam - Credit: doganmesut@hotmail.com / DepositPhoto - License: DepositPhotos
Business
Unilever
GSK
Pfizer
Thursday, 20 January 2022 - 07:00
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Unilever won't boost £50 billion bid for for GSK consumer brands

Food and consumer goods giant Unilever is not expected to increase its offer for the consumer healthcare division of pharmaceutical firm GlaxoSmithKline. Unilever previously proposed a 50 billion pound takeover of the GSK businesses, which include well-known brands, like Aquafresh, Panadol, Advil, Centrum, and ChapStick.

News of the Unilever bid leaked out on Friday, as did the rejection of the offer by GSK and minority shareholder Pfizer. The companies were rumored to be seeking 60 billion pounds, or more, in a possible sale. GSK was expected to spin off the division, but is also facing pressure from activist shareholders to sell it.

There were further rumors that Unilever might sweeten its offer. The company said the GSK division fit well with its future focus on beauty, health, and hygiene products. Even at 50 billion pounds, it would still be the largest-ever acquisition for Unilever.

Unilever shares fell sharply in trading on Monday and Tuesday after news of the failed bid and its continued interest in GSK leaked out. Seven percent of share value was wiped out on Monday, followed by another decrease of 3.5 percent. The latter was also a shareholder reaction to a warning from Fitch that the acquisition would cause Unilever's debt levels to rise. As such, Fitch said it would likely have a negative impact on Unilever's credit rating.

Instead, Unilever said it will continue to be financially strict in its decision-making as it pertains to the acquisition. The company may also sell off some of its food brands which are not growing fast enough. Last November, it sold off most of its tea businesses, including Lipton, Pukka, and Tazo, for 4.5 billion euros to CVC Capital Partners.

Though a British company now, Unilever was created by the merger of Dutch and English companies. The firm still employs 2,500 people in the Netherlands.

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