GSK rejects $68B bid for Consumer Healthcare from Unilever

Jan. 18, 2022

GlaxoSmithKline rejected a $68 billion offer from Unilever to buy GSK’s Consumer Healthcare business — the joint venture between GSK and Pfizer.

GSK has rejected all three of Unilever’s unsolicited offers, saying that the proposals undervalued the Consumer Healthcare business and its future prospects. The board of GSK unanimously concluded that the proposals were not in the best interests of the company’s shareholders.

For Unilever, the rejection could spell trouble. The British consumer goods giant is dealing with steep inflation and slow growth in emerging markets, where it derives 60% of its revenues. Unilever’s stocks have fallen recently, amidst confusion over the company’s direction and pressure from shareholders.

In a press release, GSK said it was well-positioned to grow ahead of its categories in the years to come — and  because of this, Unilever's proposals "fundamentally failed" to reflect the value of the Consumer Health business and its potential. GSK cited an increased focus on health and wellness, significant demand from aging populations and an emerging middle class as drivers of future growth.

The joint-venture between GSK and Pfizer, of which GSK has the controlling interest, was estimated to bring in $5.6 million in annual cost savings by 2022 when the deal was closed in 2019. Its focus was the integration of the two businesses and their powerful portfolios, said Brian McNamara, CEO of GSK, at the time of the deal closing.

GSK said it will remain committed to its previously proposed demerger that is on track to be achieved in mid-2022. The demerger will move the Consumer Healthcare business into a separately listed company that focuses on industry-leading brands targeting over-the-counter healthcare needs like oral health, pain relief, cold, flu and allergy and more.