Reckitt Benckiser buys Durex maker SSL for 2.54 bln pnds
Reckitt Benckiser, the Anglo-Dutch household products and drugs group, announced on Wednesday that it has agreed to buy Durex condom maker SSL International for 2.54 billion pounds.
Reckitt said in a statement that the takeover, worth the equivalent of 3.01 billion euros or 3.9 billion dollars, will mark a "step change" for its health and personal care business.
"The boards of Reckitt Benckiser Group plc and SSL International plc are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Reckitt Benckiser plc to acquire the entire issued and to be issued share capital of SSL," the group said.
The deal will bring together SSL's leading consumer goods brands, like Durex condoms and Scholl footcare products, with Reckitt's Air Wick air fresheners, Nurofen headache treatments, Dettol surface cleaners and Vanish stain removers.
"The acquisition of SSL will provide a step change to Reckitt Benckiser's global health and personal care business, which has been a key driver of Reckitt Benckiser's net revenue growth and profit progression," said Reckitt chief executive Bart Becht in the statement.
"It is anticipated that the acquisition will increase Reckitt Benckiser's health and personal care net revenues by over 36 percent to approximately 2.8 billion pounds, one third of the group's total net revenues."
The group said added that it has agreed to pay 1,163 pence per share, plus a final shareholder dividend of eight pence per share. The total value of the offer is 2.54 billion pounds.
Reckitt added that the deal will add to its stable of so-called "powerbrand" products, which also include Cillit Bang cleaning goods.
"The acquisition will add two new Powerbrands, with good further growth potential, to Reckitt Benckiser's current arsenal, making 19 Powerbrands in total," said Becht.
"Durex, in the sexual wellbeing category, is the global number one condom brand and Scholl is the market leader in the footcare category in many of the markets where it is present."
Becht also said that the takeover would enhance the scale and critical mass of Reckitt's business in China and Japan, adding that it would generate cost savings of 100 million pounds per year from 2012.
The bid price represents a premium of nearly 33 percent from London-listed SSL's closing share price on Tuesday.
© 2010 AFP