Reckitt Benckiser is the world #1 in household cleaning, with a huge portfolio of well-known brands ranging from cleaning products Lysol, Dettol, Harpic, Calgon and Vanish to automatic dishwasher tablets Finish, Electrasol and Jet-Dry. Virtually the only household care segment in which it doesn't have a major presence is laundry detergents, where it has avoided competition with traditional leaders such as P&G and Unilever. In 2005, the group bolstered its small portfolio of over-the-counter medicines with the purchase of Boots' healthcare products portfolio, which includes brands such as Nurofen and Strepsils. It strengthened this business further by buying US company Adams Respiratory, makers of Mucinex, in 2007. The group began 2010 with net cash of around £220m, raising speculation that a significant new acquisition could be on the cards. Mid-year it issued an offer to acquire SSL International, owner of Durex condoms and Scholl footcare products outside the US, followed by Indian marketer Paras Pharmaceuticals. In its most significant purchase to-date it snapped up infant formula manufacturer Mead Johnson in 2017.
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Adbrands Weekly Update 29th Mar 2018: Both of the main suitors for Pfizer's $20bn consumer healthcare division dropped out during the course of last week. Reckitt Benckiser - which had been considered the favourite to buy the business - withdrew mid-week, leaving rival GlaxoSmithKline with a clear path to conclude a deal. However, the British group also dropped its bid on Friday. Both companies indicated the high cost of the business as a factor. RB's CEO Rakesh Kapoor said that his priority at this point is organic growth and that he had been interested in only part of Pfizer's portfolio: "An acquisition for the whole Pfizer consumer health business did not fit our acquisition criteria and an acquisition of part of the business was not possible." GSK's CEO Emma Walmsley also issued a brief statement: "While we will continue to review opportunities that may accelerate our strategy, they must meet our criteria for returns and not compromise our priorities for capital allocation." As if to emphasise her diligence, she instead announced plans to use $13bn (or around £9.2bn) of the cash that might have been spent on Pfizer to buy out the minority stake Novartis has held in GSK Consumer Healthcare division since their two respective portfolios were combined. A sale could generate as much as £3.5bn. In the mean time, it's not clear whether other potential buyers remain for Pfizer's OTC division. The US company might consider an IPO or spin-off of the business to shareholders, or might simply hang onto it for the time being.
Adbrands Weekly Update 8th Feb 2018: According to media reports, there are only two bidders left in the $20bn auction of Pfizer's consumer healthcare division: GlaxoSmithKline and Reckitt Benckiser. Most observers expect RB to win the prize, since GSK would need the approval of its healthcare partner Novartis, which might not be forthcoming. Meanwhile, the simultaneous auction of Merck KGaA's OTC division has been thrown into doubt after favoured bidder Nestle walked away over the German group's over-ambitious price expectations, thought to exceed €4bn.
Adbrands Weekly Update 19th Oct 2017: Reckitt Benckiser reported another disappointing quarter, its sixth in a row, with like for like revenues falling by 1%, and a revised forecast of flat performance for the year as a whole. Investors had expected a 1% increase for the latest quarter. As a result, the group said it will restructure as two distinct divisions from the beginning of next year. RB Health, which manages brands such as Nurofen, Durex, Mucinex and newly acquired Mead Johnson Nutrition, will be led by group CEO Rakesh Kapoor. RB Hygiene Home - Dettol/Lysol, Vanish, Finish etc - will be led by Rob de Groot, currently head of the main Europe and North America business. Though no comments were made regarding a potential break-up of the business, the new structure would allow for Hygiene Home to be more easily divested. RB has already said it is keen to expand further into consumer health, and has previously expressed interest in other OTC businesses currently up for sale, such as Pfizer or Merck KGaA. Any such deal would be hampered by RB's existing debt. A potential sale of RB Hygiene Home could resolve that problem. Current rivals including Unilever, SC Johnson or even P&G, are likely to be among the potential buyers.
Adbrands Weekly Update 20th Jul 2017: Some brands may not be especially glamorous or celebrated but they still have extraordinary transfer value if they fill an important need for a particular buyer. One such deal was agreed this week. Reckitt Benckiser, best-known for household cleaning and consumer healthcare, accepted a knock-out offer of $4.2bn for its odd-man-out culinary sauces division, comprising French's mustard and Frank's hot sauce. The buyer is spice giant McCormick, which fended off rival offers from Unilever and Hormel. The price offered is more than generous: sales of RB's sauces division are only around $300m to $350m.
Adbrands Weekly Update 15th Jun 2017: Ads of the Week: "I Love Doing Dishes". We'll probably never know why Reckitt Benckiser called it quits on their relationship with Wieden & Kennedy London over dish detergent Finish. Could it be that the work was just *too* creative for that notoriously conservative client? W&K have decided to go out with a bang - literally - with a true showstopper of a final ad on the account. The previous ads have been surreal, but this one really pulls out all the stops. RB might be sorry when they're back to old pedestrian stuff again.
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Free for all users | see full profile for current activities: The Colman in Reckitt & Colman was originally the well-known mustard manufacturer (sold off to Unilever in 1995). Jeremiah Colman set up a mill in Norwich, England in 1814, processing flour and mustard seed. In 1823, his nephew James joined the business, which became J&J Colman. Keen not to waste any of the by-products from the milling process, they moved into starch and laundry whiteners around 1840. At around the same time, Isaac Reckitt acquired a starch factory in Hull, and also began making laundry whitener as well as polish. Inherited by his four sons, the business flourished, expanding overseas with an Australian factory in 1886. Two years later, the company went public in London.
By the early 20th century both companies had fast-growing international businesses, and Colman's had a virtual monopoly of the British mustard industry, having bought up all of their regional competitors. Rather than fight for trade, Colman and Reckitt formed a partnership in 1913 under the name Atlantis, initially to enter South America. Subsequently this operation expanded to encapsulate all of both companies' international operations, including the acquisition of US food company RT French in 1920. Also in 1913, Reckitt & Sons became a partner in the UK-based Chiswick Polish Company, making a range of metal and shoe polishes, including top brand Brasso. This company also grew rapidly, introducing a wide range of other household goods, and renaming itself Chiswick Products in 1930.
In 1933, Reckitt & Sons introduced germicide Dettol, which rapidly became one of the company's most successful brands. Five years later, Reckitt and Colman sealed their highly productive Atlantis joint venture with a formal merger. Chiswick Products also became a wholly owned subsidiary of the group in 1954. The group continued to grow through acquisition, especially in the US. In 1985, air freshener group Airwick Industries joined the business, followed in 1990 by American household products group Boyle-Midway, whose brands included Woolite, Wizard and Sani-Flush. An attempt to enter the US condiments market was less successful. The group had acquired Durkee's Famous Foods in 1986, but finally gave up the business, selling off the seasonings division in 1992. In 1994, Reckitt & Colman paid Eastman Kodak $1.6bn for Lehn & Fink, makers of leading American disinfectant Lysol. To fund the L&F purchase, Colman's foods was sold to Unilever for $405m a year later, and the US personal products division to a private investment group for $123m in 1996. The latter included a miscellaneous collection of non-core baby wipes, bubble bath and breath spray brands.
In 1997, the group acquired fabric cleaners Spray'n Wash, Vivid, Yes and leading glass cleaner Glass Plus from SC Johnson for $160m. Also that year the group formed a joint venture with Indian pharmaceutical company Nicholas Piramal to market their respective consumer healthcare brands. Reckitt Piramal began operations in January 1998, quickly becoming the # 1 OTC manufacturer in that country. It later changed its name to Reckitt Benckiser India.
However, during 1998 the company was dogged by a series of competitive problems, particularly in the US following the L&F acquisition. These culminated in a profits warning in late 1998. Chief executive Vernon Sankey offered his resignation early the following year, claiming the company needed a fresh perspective. A few months later the group unveiled plans for a complete transformation, revealing that it would merge with Dutch group Benckiser (see Coty profile for more) to create the world's biggest non-laundry household products group. The deal was framed as a purchase by the British company of its Dutch counterpart - Reckitt shareholders received the majority share in the new company and company HQ remained the UK. However it was in effect a reverse takeover by the Dutch company - most of Reckitt's senior management team left the business as part of the deal, and Benckiser boss Bart Becht was installed as CEO of the enlarged business.
Just six days after finalizing the merger, Reckitt Benckiser saw its share price plunge after issuing another profits warning. The group blamed lack of investment in Reckitt & Colman's brands in 1999 for a fall in profits. These were later revealed to be down sharply by 88% to £52.5m, worsened by reorganisation and merger costs of almost £260m. The group promised to accelerate revenues in 2000, and cut 75 of its smaller products to concentrate on 50 key brands. CEO Becht lived up to his promise, shedding a number of small household brands in Australia and New Zealand (including Janola, Aura, Bluo, Longlife, Scotts and Soft as Soap), as well as its Gesal plant care business in Italy and Austrian skincare company Savoderm.
The group then announced the acquisition of Korea's #4 household goods business Oxy Co for $128m. Its brands include Oxy Clean fabric treatment, Tinkerbell air care, Cherie fabric softener and Thirsty Hippo de-humidifier. However at the same time, Reckitt announced the launch of a consolidation drive to merge most of its regional brands into 15 global "power brands". Over the following months a series of brand mergers were announced. The UK's Dettox brand was merged into Dettol during 2002; and Haze air fresheners worldwide into Airwick. UK-based depilatory product Immac was rebranded as Veet, its name in other territories. In a separate development Reckitt withdrew its well-known UK household insecticide Vapona in early 2002 after evidence that one of its ingredients could cause cancer.
In 2003 the group was reported to be in negotiations to acquire SSL International, which owns Durex condoms and Dr Scholl footcare products in the UK, but that deal failed to materialize. Far more substantial was the purchase of Boots' international healthcare products division in 2005 for £1.9bn. RB returned to SSL in 2010, tieing up a deal to acquire the business for £2.5bn. See full profile for current activities
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