Please login to the form below

Not currently logged in
Email:
Password:

Reckitt wins battle for Boots

Market analysts welcome Reckitt Benckiser's acquisition of BHI dubbing the deal as ìhard to faultî

Reckitt Benckiser has held off stiff competition from pharmaceutical multinationals to win the auction for Boots' over-the-counter medicines business with a higher than expected £1.93bn cash bid.

The deal, which will bring together Reckitt's Lemsip and Disprin cold remedies together with Boots' Nurofen painkiller, was concluded after the British group narrowly outbid Swiss company Novartis in the early hours of Friday (October 7). GlaxoSmithKline has confirmed that it was outbid in the last stage of the auction the previous day.

The final price was 22 times Boots Healthcare International's (BHI's) operating profits of £88m for the financial year to March 2005. Despite initial investor concerns that Reckitt had overpaid for BHI, analysts said the acquisition made sense.

ìStrategically the deal is hard to fault,î said Richard Workman at Oriel Securities. ìReckitt is buying good brands and has a good record on delivering on synergies.î

Reckitt chief executive, Bart Becht, said the company hopes to achieve cost-savings of £75m and £130m of net working capital gains by 2008, while the deal is expected to be earnings enhancing from the day it goes through (expected to be early next year), excluding a £150m one-off charge.

Boots was required to sell the healthcare business before it could merge with Alliance Unichem in a £7bn deal. Other pharmaceutical companies reported to have been interested in BHI were Pfizer and Bayer.

30th September 2008

Share

Featured jobs

Subscribe to our email news alerts

PMHub

Add my company
Cogora

Cogora has been a leader in healthcare publishing for over 30 years and has become one of the leading full-service...

Latest intelligence

AstraZeneca’s oncology renaissance
Susan Galbraith played a key role in restoring AstraZeneca’s place in cancer drug development – she talks about the future of oncology and why there’s more to be done to...
Navigating the antibiotic resistance crisis
Blue Latitude Health speaks to Tara DeBoer, PhD, Postdoctoral Researcher and CEO of BioAmp Diagnostics to explore the antimicrobial resistance crisis, and learn how a simple tool could support physicians...
Combined immunotherapies – potential and pitfalls
‘Combining therapeutic compounds is the first logical step towards better results, namely higher rates of patients responding to treatment, with deeper and more sustained responses’...

Infographics