Unilever walks away from GSK Healthcare biz

Jan. 20, 2022

Unilever officially walked away from its attempts to buy GlaxoSmithKline’s Consumer Healthcare business with the consumer goods giant announcing it would not raise its original $68 billion offer. 

GSK previously rejected all three of Unilever’s unsolicited offers to buy the Consumer Healthcare business, saying the proposals undervalued the business and its future prospects. The business, of which Pfizer owns a 32% stake, will be separately listed in 2022, according to a GSK spokesperson. 

“The Consumer Healthcare business has an exceptional portfolio and offers existing and prospective shareholders a highly attractive financial profile supporting investment and future returns,” said a spokesperson for GSK.  Updated financial forecasts projected annual growth of 4%-6% for the Consumer Healthcare business in the upcoming year.

Meanwhile, Unilever is dealing with inflation and slow growth in emerging markets, where it derives 60% of its revenue. The company decided not to raise its bid for the Consumer Healthcare business after stocks fell 8% earlier in the week, amidst confusion over the company’s direction, financial implications, and pressure from shareholders. After Unilever abandoned its offer for GSK’s spin-off business, Unilever's stocks rose 10.1%. 

With both companies facing pressure from investors, a deal between the two giants could have had enormous impacts. 

GSK plans to discuss further details of the strategy for its consumer brands unit at an investor day on February 28.