Reckitt agrees £2.5bn bid for Durex maker
CONSUMER goods group Reckitt Benckiser yesterday agreed to buy Durex condoms and Scholl sandals maker SSL International for £2.5bn in cash to increase its presence in the health and personal care markets.
The Anglo-Dutch maker of Nurofen painkillers, Strepsils and Lemsip cold remedies, said SSL stockholders would receive 1,171p a share.
Regulators and investors are still to be officially presented with the deal and rival bidders could still jump in.
SSL – which made sales of £802.5m last year – also has pain relief brands such as Cuprofen and Paramol.
Reckitt chief executive Bart Becht said: “It is anticipated that the acquisition will increase Reckitt Benckiser’s health and personal care net revenues by over 36 per cent to approximately £2.8bn, one third of the group’s total net revenues.”
Reckitt added the purchase would also boost its presence in markets in Japan and China.
Gerald Corbett, chairman of SSL, said the offer was four times the level of SSL’s share price five years ago. He added: “I am sure our brands and people will be in good hands.”
But the groups warned that the integration of the two firms is expected to lead to job cuts in commercial and administration functions.
The company said it expected cost savings in the region of £100m a year from the combined group by the end of 2012. London-based SSL currently employs 10,000 people worldwide including at two UK factories in Manchester and Cornwall.
Deutsche Bank was hired as an adviser to Reckitt, while JP Morgan Cazenove, Lazard and Credit Suisse were all signed up by SSL.
Darren Shirley, an analyst at Shore Capital, said: “We believe the proposed acquisition represents good business for Reckitt, increasing the exposure to consumer healthcare while offsetting some of the ongoing challenges from the sluggish European consumer.”
MELANIE GEE
LAZARD
Melanie Gee led a team of six senior bankers working for SSL on the proposed deal with Reckitt Benckiser.
William Rucker, chief executive of Lazard London and Alexis de Rosnay, head of global healthcare, were also on the team.
The move for SSL has been shrouded in secrecy for the past five weeks as the negotiations went on behind the scenes. Lazard is satisfied that it has negotiated an “excellent” price for SSL shareholders and indicated that the deal could signify that confidence in the consumer market was picking up.
Gee also advised the Al Fayed Trust on the sale of Harrods. She also advised the management of Marken Group and Intermediate Capital Group on the sale of Marken to a consortium comprising funds advised by Apax Partners.
Lazard operates in 40 cities in key business and financial centres across 26 countries in Europe, North America, Asia, Australia and South America. It advises corporations, partnerships, institutions, governments and high-net-worth individuals on a range of deals. It was founded in New Orleans in 1848 following the Californian Gold Rush. It specialises in mergers and acquisitions.