GSK division undervalued: Unilever flashes off with billion-dollar offer

GSK division undervalued
Unilever flashes off with a billion-dollar offer

The consumer goods group Unilever, known for brands such as Langnese, Knorr or Pfanni, wants to grow in the health sector. He therefore expresses his interest in a division of Glaxosmithkline. But the offer of around £50 billion has met with little enthusiasm.

Consumer goods group Unilever is facing resistance from pharmaceutical giant Glaxosmithkline with a billion-dollar bid for its consumer goods division. With the offer worth around 50 billion pounds or the equivalent of 60 billion euros, the division and its prospects would be fundamentally undervalued, explained Glaxosmithkline.

unilever 47.34

The preparations for the IPO planned for the middle of the year would continue. Unilever confirmed the offer and left open the question of a possible increase. A transaction of this magnitude would be the largest worldwide since the beginning of the corona pandemic. The US pharmaceutical group Pfizer has held a 32 percent stake in the consumer goods division of the British company Glaxosmithkline since the two companies merged their respective businesses in 2019. According to a report in the “Sunday Times”, Pfizer also rejected the offer from the British-Dutch Unilever as too low.

With brands such as Sensodyne toothpaste, the painkiller Voltaren and Otriven nasal spray, the division recently earned £10 billion and thus contributed almost a third of GlaxoSmithkline’s £34 billion annual turnover. According to GlaxoSmithKline, it received three offers from Unilever, the last of which was on December 20. This included £41.7 billion (€50 billion) in cash and £8.3 billion (€10 billion) in Unilever shares.

Wave of splits and splits

Glaxosmithkline
Glaxosmithkline 19.86

Unilever said GSK Consumer Healthcare is a leader in consumer healthcare and would therefore be a good strategic fit with Unilever. The group, known for Langnese ice cream, Knorr sauces or signal toothpaste, left open whether it would make another attempt: “There can be no certainty that an agreement will come about.” Last year, activist investor Elliott called for the consumer health division to be sold.

Elliott had calculated that if GlaxoSmithkline completely divested itself of the division, this could drive the share price up by 45 percent. The US pharmaceutical company Johnson & Johnson (J&J) is also splitting off its business with over-the-counter medicines and other health products. There is currently a wave of splits and splits around the world. They follow the theory that conglomerates are often valued lower in the stock market than their individual parts.

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