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European consumer giant Reckitt Benckiser Group Plc (OTC:RBGLY) (OTC:RBGPF) has reportedly kickstarted preliminary talks with potential buyers regarding the sale of its homecare division, which features well-known brands such as Air Wick, Mortein, Calgon, and Cillit Bang.
In July, Reckitt announced initiatives aimed at reshaping the company into a leading global player in the consumer health and hygiene sectors.
The company announced its plans to streamline its brand portfolio and simplify its organizational structure.
Reckitt said it will focus on its top-performing “Powerbrands,” which are highly popular with consumers and dominate market categories with substantial growth potential.
Reckitt said it will divest its home care brands—collectively generating roughly $2.52 billion (1.9 billion pounds) in net revenue in FY2023—by the end of 2025.
The company will explore all options to optimize shareholder returns in the process.
According to the Bloomberg report, the deal could be valued at more than 6 billion pounds ($7.93 billion), and it has garnered interest mostly from financial investors and some consumer companies.
Additionally, Reckitt considers its Mead Johnson Nutrition business, including the Enfamil and Nutramigen baby formula brands, non-core and will evaluate strategic alternatives.
The company is working with Goldman Sachs Group Inc (NYSE:GS) to evaluate options.
Reckitt’s infant formula division, established through a massive $17 billion purchase of Mead Johnson in 2017, has proven challenging for the company. Reckitt has incurred approximately 9 billion pounds in charges related to the unit, including losses from selling its Chinese operations.
The report also noted that CEO Kris Licht admitted that the infant formula business has not always aligned well with the rest of the company.
In January, the company initiated a massive recall of hypoallergenic infant formula due to concerns over potential bacteria contamination. The recall involves approximately 675,000 cans of infant formula.
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