Unilever targets Reckitt Benckiser's food division

Unilever is allegedly interested in Reckitt Benckiser’s food division, but would have to fend off American Hormel Foods. Price: about 2.5 billion euro.

Looking for higher profit

Reckitt Benckiser revealed in April it was willing to sell its food division in order to (partly) fund its 16.6 billion dollar (15.6 billion euro) children’s food manufacturer Mead Johnson Nutrition’s acquisition.

However, several other interested parties have surfaced, all interested in the division which owns brands like French’s Foods. Unilever and Hormel Foods are two of the possible new owners, but despite their higher chances, others may still intervene. Reckit Benckiser expects the final bids to arrive soon.

The company’s food division generated a 411 million pound (470 billion euro) turnover last year, which is about 4 % of its total turnover. The division mainly focuses on the American market.

Reckitt Benckiser recently lowered its full-year turnover forecast, because several of its brands’ shipments were hit by the global ransomware cyber-attack. The British group now expects a 2 % turnover increase instead of the previously mentioned 3 %.

Unilever is looking for more profitability and this acquisition would help in that regard. Several of its shareholders were not pleased when it recently rejected a Kraft Heinz bid, because they wanted more short-term profit, which is why Unilever is now targeting profitable targets.