Unilever launches £50billion bid to buy GSK’s consumer arm

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It would be one of the largest UK takeovers and comes after three unsolicited bids from the owners of Dove, Vaseline and Marmite last year. The fresh approach was revealed as GSK spins off its consumer arm, which includes Aquafresh toothpaste and Panadol painkillers, from its pharmaceuticals unit in a radical shake-up.

Unilever’s offers were all rejected by GSK and US drugs giant Pfizer, which has a minority stake.

The last bid, on December 20, included £41.7billion in cash and £8.3billion worth of Unilever shares.

GSK rebuffed the move as it “fundamentally undervalued” the business and “its future prospects”.

It added: “The board of GSK therefore remains focused on executing its proposed demerger of the consumer healthcare business, to create a new independent global category-leading consumer company which, subject to approval from shareholders, is on track to be achieved in mid-2022.”

It is understood that the approach was knocked back because it failed to put a premium on analyst valuations and did not account for potential cost savings in a merger with Unilever’s own consumer healthcare brands.

Unilever said: “Unilever notes recent reporting regarding its interest in GSK Consumer Healthcare and confirms that it has approached GSK and Pfizer about a potential acquisition of the business. 

GSK Consumer Healthcare would be a strong strategic fit as Unilever continues to reshape its portfolio. There can be no certainty that any agreement will be reached.”

Unilever’s bid comes as chief executive Alan Jope moves to alleviate investor pressure over its lacklustre financial performance, which saw shares tumble nine per cent last year.

Unilever’s pre-tax profits plunged from £10.3billion in 2018 to £6.6billion in 2020.

A deal with Unilever would require a departure from GSK’s plan to carve out its consumer business as a separately listed FTSE 100 company by the summer. 

It has discussed selling a keystone stake to a sovereign wealth fund or other investor.

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