The owner of French’s Food brand was progressing well in its acquisition of Mead Johnson Nutrition, it said in its first-quarter trading update.
Reckitt Benckiser ceo Rakesh Kapoor said: “The acquisition of Mead Johnson, to create a global leader in consumer health, is progressing well and we expect completion by the end of [the third quarter].”
To fund the multimillion-pound deal, Reckitt Benckiser reportedly began a strategic review of its non-core French’s Food brand earlier this month. French’s Food – which makes mustard, ketchup, barbecue sauce and fried onions – could be sold for about £2.3bn, it was predicted.
‘Drive shareholder value’
Kapoor said: “We have commenced a strategic review of our Food business as we continue our focus on portfolio optimisation. We remain very confident that the strategic direction we are pursuing will continue to drive shareholder value.”
In its first-quarter trading update, published on April 21, Reckitt reported a 3% boost in like-for-like sales in its Food business to £105M. The business generated 4% of Reckitt’s overall net revenue in the three months to March 31.
Reckitt Benckiser reported a 15% rise in overall sales to £2.64bn.
“Our first-quarter results are in line with expectations, as macro conditions remain challenging. Against this backdrop, our underlying business remains strong,” said Kapoor.
‘Growth trajectory to improve’
“I expect our growth trajectory to improve as we progress through the year, and we remain on track to achieve our full year net revenue target of 3% like-for-like growth.”
Reckitt also said its acquisition of Mead Johnson was a significant step forward for the company, and would boost growth even further. Speaking when the acquisition was announced in February, Kapoor said its presence in developing markets would be “considerably strengthened”, particularly in China.
Meanwhile, on April 3 it was reported that Kraft Heinz might be interested in French’s, following its botched attempt to acquire Unilever in February.
- Acquisition of Mead Johnson is “progressing well”
- On track for completion by end of September
- Food business sales up 3%