Reckitt sells cleaning unit to Advent for $4.8 billion

Reckitt's sale aims to sharpen focus on high-growth product lines.

Reckitt sells cleaning products unit for $4.8bn to Advent

Reckitt has agreed to sell its Essential Home cleaning products division to private equity firm Advent International for up to $4.8 billion. This move is part of Reckitt's strategy to concentrate on faster-growing brands. The deal allows Reckitt to keep a 30 percent stake in the cleaning products unit, which includes brands like Cillit Bang and Air Wick. Following the announcement, Reckitt shares rose by 2 percent. Analysts have described the outcome as underwhelming, citing a lack of a complete exit and noting that the sale price was significantly lower than expected. Reckitt plans to distribute about $2.2 billion from the sale to shareholders through a special dividend. The deal is set to finalize by the end of December.

The sale of Reckitt's cleaning products division highlights a common trend in the consumer goods sector, where companies are reevaluating their portfolios. By divesting less profitable segments, Reckitt aims to strengthen its position in high-growth categories. However, the cautious response from analysts suggests that the deal may not meet investor expectations. High hopes were set for this sale, but the reality of an ongoing stake and lower sale price has raised concerns about Reckitt’s long-term strategy and market performance.

Highlights

Reckitt's strategic choices will be closely watched as markets evolve.