Reckitt Benckiser confirms a strategic review of its food business, including French's mustard and Frank's Red Hot sauce

 
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French's mustard is one of RB's popular food brands (Source: Getty)

It's official: Reckitt Benckiser (RB), the maker of Durex condoms and Dettol cleaners, is beginning a "strategic review" of its food business.

"French's Food is a truly fantastic business with great brands, people and a history of outperformance. It is nevertheless non core to RB," the company said in a statement.

"We have therefore decided to initiate a strategic review of food where we will explore all options for this great business."

The news follows reports that RB was planning to sell its £2bn food division to help fund its takeover of US baby formula maker Mead Johnson for $17.9bn (£14.3bn). RB's push to become a bigger consumer health player means its food division has become a low priority. It accounts for just five per cent of the company's global sales.

The deal would see RB ditching brands including French's mustard and Frank's Red Hot sauce in a transaction that could raise more than $3bn (£2.3bn).

US giant Kraft Heinz is expected to show an interest in the auction after its takeover bid for Unilever in February fell apart.

Darren Shirley, analyst at Shore Capital, said RB's food unit is in good health, delivering five per cent of constant currency revenue growth in 2016 with sales of £411m.

"Whilst any disposal of food would be helpful in the deleverage of the RB business post the proposed Mead Johnson infant nutrition acquisition, we would in no way expect it lead us to change our 'hold' stance on RB’s stock," Shirley said.

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