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Reckitt Benckiser enters agreement to sell food business to McCormick
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Thursday, 20 July, 2017, 08 : 00 AM [IST]
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Slough
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Reckitt Benckiser Group plc (RB) has entered into an agreement to sell its food business (RB Food or French’s Food), including the French’s, Frank’s RedHot and Cattlemen’s brands, to McCormick and Company Inc for $4.2 billion on a cash-free, debt-free basis.
The announcement follows a comprehensive strategic review of French’s Food. The valuation achieved reflects the quality of this highly profitable, growth business.
McCormick will retain the three aforementioned brand names. RB Food’s focus on creating high-quality products with simple ingredients makes it a strong match with McCormick.
Rakesh Kapoor, chief executive officer, RB, said, “Our French’s Food business is a true reflection of RB’s strengths – a portfolio of great brands driven through a culture of innovation by passionate people to deliver consistent outperformance.”
“We are pleased to be selling to owners who can provide the necessary resources, market expertise and global platform, whilst being a good home for our people. French’s Food is well positioned to continue on its successful growth trajectory under the food-focused ownership of McCormick,” he added.
“Following the acquisition of Mead Johnson Nutrition, this transaction marks another step towards transforming RB into a global leader in consumer health and hygiene, ensuring we continue to deliver for shareholders and give people innovative solutions for healthier lives and happier homes,” Kapoor said.
The consideration is subject to customary working capital adjustments at completion. RB intends to use the net proceeds to reduce its debt. The transaction is subject to certain regulatory approvals and completion is expected during the third quarter of 2017. The transaction constitutes a Class 2 transaction for the purposes of the UK Listing Rules.
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