Reckitt to Divest Essential Home Business
The Reckitt Benckiser Group is selling its essential home business to global private equity firm Advent International in a $4.8 billion deal. As part of the agreement, Reckitt will retain a 30% equity stake in the business.
The transaction includes around 80 brands sold across 70-some markets, including Air Wick, Calgon, Woolite, Cillit Bang, Resolve, Sole and Easy-Off.
Reckitt’s Business Strategy
The deal is part of an overhaul strategy Reckitt implemented last July to focus on a portfolio of 11 high-growth, high-margin "Power Brands," including Mucinex, Gaviscon, Lysol, Finish, Vanish, Durex and others.
As part of this, Reckitt simplified its organizational structure, moving away from its global business unit model to focus on three geographic regions: North America, Europe, and emerging markets.
The company’s interest in six manufacturing plants will be transferred in the sale, including locations in Tijuana, Mexico; Tatabanya, Hungary; Derby, UK; Granollers, Spain; and Porto Alto, Portugal.
The company also plans to separate part of the Raposo plant in Brazil in the future, and the essential home business will also own the Mortein brand in North America, Europe and Latin America.
Ranjan Sen, managing partner at Advent, said in a statement that the essential home business provides “a unique opportunity to create a focused, scaled platform of globally recognized home care brands that operate in attractive categories with structural growth tailwinds.”
Reckitt expects to finalize the deal by the end of the year.
