Reckitt Benckiser mulls £2.4 bn sale of foods division

Consumer goods giant Reckitt Benckiser Group plc, is mulling selling its foods division, in order to raise money for its proposed $16.6- billion acquisition of baby food maker Mead Johnson, The Sunday Times reported yesterday.

Reckitt Benckiser, which owns Durex condoms and Scholl footcare, has told banks it plans to sell its foods division, which could fetch more than £2.4 billion ($3 billion), the report said.

In February, Reckitt Benckiser agreed to buy Mead Johnson Nutrition for $16.6 billion in cash, a deal that will almost double the size of the British company's consumer-health business and help it push deeper into emerging markets. (See: Reckitt Benckiser to acquire Mead Johnson for $16.6 bn in cash)

Including Mead Johnson's net debt of $1.2 billion, the total enterprise value of the transaction is $17.9 billion, and the deal is expected to be completed by the end of the third quarter of this year.

Its food division experienced the weakest growth, with sales rising by 2 per cent. The division had sales of £411 million last year.

The food division, which include French's mustard and Frank's RedHot sauce, make up only 5 per cent of group revenues, which had led to speculation that the London-based company may divest the unit in order to focus on the higher-growth consumer healthcare market.

Products in its food division include French's mustard, French's potato sticks, French's Taste Toppers french fried onions, Franks Original RedHot cayenne pepper sauce and French's Worcestershire Sauce.