Sector News

GlaxoSmithKline’s Indian consumer sale heats up with Reckitt, Kellogg joining the fray: report

August 23, 2018
Life sciences

More big-name suitors are jumping into the mix for GlaxoSmithKline’s Indian consumer health unit. After earlier reports that Danone, Nestle and others were on the verge of a bidding war, Kellogg and Reckitt Benckiser are said to be suiting up for the fight.

The cereal giant and the consumer behemoth are the latest to jump into the fray, according to The Economic Times, which also lists Unilever, Mondelez and Coca-Cola as potential buyers. Both of the new suitors have wrapped up initial evaluations, with Rothschild advising Kellogg, and Goldman Sachs steering RB, sources told the Indian publication.

The addition of Reckitt is no surprise, considering CEO Rakesh Kapoor’s worldwide growth strategy and penchant for M&A. Its last big buy in the Indian market was Paras Pharmaceuticals back in 2010, but more recently, it landed its largest-ever pickup in U.S. baby formula business Mead Johnson.

Reckitt has been looking for more, too. Earlier this year, it chased Pfizer’s consumer health business, only to pull out once it was clear it couldn’t strike a bargain for just one piece of the unit. But GSK’s Indian consumer business, which analysts say could fetch $4 billion, would be much easier to swallow than Pfizer’s entire unit, which the New York drugmaker expected to bring $20 billion.

Kellogg, on the other hand, is more of a surprise to industry watchers after its conservative history in India. But the company is looking to diversify away from cereal—which some markets now perceive as overly sugary and artificial—with more health-focused buys, TET notes. GSK’s popular drink brands Horlicks and Boost, which fall under the health umbrella, could help it do just that.

Meanwhile, a little bidding competition would be welcome for GlaxoSmithKline, which is looking to sell off its share in the Indian GlaxoSmithKline Consumer Healthcare Ltd. to help it fund its own consumer buy. It announced that it’d be shopping the stake at the same time it revealed a $13 billion agreement for Novartis’ share of the pair’s consumer joint venture.

The British pharma giant has been clear that it doesn’t intend to back away from India in general, though. The country “remains a priority market for GSK investment and growth,” the drugmaker said in March, adding that it would continue to back OTC and oral health brands and invest in pharmaceuticals and vaccines there, too.

By Carly Helfand

Source: Fierce Pharma

comments closed

Related News

May 21, 2022

As monkeypox cases emerge in US and Europe, Bavarian Nordic inks vaccine order

Life sciences

A monkeypox outbreak is emerging in the U.S. and Europe, and at least one country is amping up countermeasure preparedness. Bavarian Nordic has secured a contract with an unnamed European country to supply its smallpox vaccine, called Imvanex in Europe, in response to the emergence of monkeypox cases, the Danish company said Thursday.

May 21, 2022

Moderna chairman Afeyan defends hiring practices after CFO debacle: report

Life sciences

Moderna’s recent chief financial officer debacle—in which Jorge Gomez departed on his second day on the job—raised questions about the company’s hiring process given its rush to global biopharma prominence. The most obvious one: How was it possible for Gomez to be hired when he was under investigation by his previous employer, Dentsply Sirona of Charlotte, N.C.

May 21, 2022

Merck to pay up to $1.4B in cancer deal with Kelun, but details are scarce

Life sciences

Merck & Co. is plucking a cancer project from the branch of Chinese-based Kelun Pharmaceutical for up to $1.4 billion, but details from the New Jersey-based Big Pharma have been hard to come by. The deal, first disclosed Monday on the Shenzhen stock exchange, has Merck handing over $47 million in upfront cash in exchange for ex-China rights to a “macromolecular tumor project.”