Reckitt Benckiser to consider sale of food businesses

By Louis Gore-Langton contact

- Last updated on GMT

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The British consumer goods behemoth is conducting a thorough review of its business as it considers a potential sale of its non-core food brands  

Following the company’s agreed acquisition​ of US brand Mead Johnson Nutrition – an infant formula manufacturer -  for €16.7bn, Reckitt Benckiser (RB) have announced the start of a ‘strategic review’ that would likely see its food brands sold off.

Whilst RB said it did not want the acquisition of Mead Johnson to require funding from the sale of its other businesses, the Financial Times speculated that the analysis would be used to consider offloading the RB food brands to increase returns on the new acquisition faster.

Currently 4% of RB’s sales come from its food businesses – which include French’s mustard and Frank’s Red Hot Sauce. RB recorded a revenue of £10.2bn (€11.9bn) in 2016

In a statement to the stock market on Monday, RB said is “Will explore all options for this great business” ​and added “French’s Food is a truly fantastic business with great brands, people and a history of outperformance. It is, nevertheless, non-core to Reckitt Benckiser. We have therefore decided to initiate a strategic review of Food.”

RB’s shares have risen 9% over the past year, and the company recently announced it would be cutting its CEO’s pay by over €10 m. 

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