Benzinga | Jan 15, 2022 02:17PM EST

GSK Spurns $68.4B Bid From Unilever For Its Consumer Healthcare Business, Opts to Spin-off The Unit

* GlaxoSmithKline rejects three purchase offers from Unilever for its Consumer Healthcare business.

* The U.K. pharma giant says the business is well-positioned to sustainably grow ahead of its categories in the years to come.

* GSK plans to create a new independent consumer company, which is on track to be achieved in mid-2022.

U.K. pharma giant GlaxoSmithKline plc (NYSE:GSK) has spurned multiple offers for its Consumer Healthcare business on the grounds that the offers undervalued the unit.

GlaxoSmithKline said in a statement Saturday that Unilever plc (NYSE:UL) tabled three unsolicited, conditional and non-binding proposals for acquiring its Consumer Healthcare business.

The third proposal made on Dec. 20 sought to seal the deal for 50 billion pounds ($68.4 billion), comprising 41.7 billion pounds in cash and 8.3 billion pounds in Unilever shares.

Glaxo said it rejected each of the three proposals on the basis that they fundamentally undervalued the business and its future prospects. The Consumer Healthcare business is a joint venture between Glaxo and Pfizer, Inc. (NYSE:PFE), with the former holding a 68% stake and the latter a 32% stake. It has among its brands are Sensodyne toothpaste and pain reliever Advil.

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The business generated annual sales of 9.6 billion pounds in 2021 and is well-positioned to sustainably grow ahead of its categories in the years to come, the company said.

It expects annual organic sales growth in the range of 4% to 6% in constant currency for the business over the medium term.

"The Board of GSK therefore remains focused on executing its proposed demerger of the Consumer Healthcare business, to create a new independent global category-leading consumer company which, subject to approval from shareholders, is on track to be achieved in mid-2022," the company said.

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