Nestle U-turn as Swiss food giant backs out from making a bid for GSK’s consumer health arm
Nestle considered making a bid for GSK’s consumer health arm earlier this year in what would have been its biggest deal ever, but backed out.
The Swiss food giant reportedly expressed its interest when Unilever made its £50billion offer in January – which failed after GSK and its shareholders snubbed the deal.
According to Bloomberg. Nestle even considered joining forces with Unilever’s consumer goods rival Reckitt to split up the healthcare division and share the spoils, but none of its plans came to fruition.
Nestle reportedly expressed its interest in buying GSK’s consumer health arm when Unilever made its £50bn offer in January
The logistics of such a huge deal reportedly became too complex.
The pharma firm plans to spin off the healthcare arm, which is behind well-known brands like Sensodyne, Panadol and Centrum, into a separate company called Haleon in July. Haleon will be the largest London listing for a decade.
GSK boss Emma Walmsley, under pressure from activist investor Elliott Investment Management, has insisted that this is the best route for the business.
Since taking the helm at Nestle in 2017, boss Mark Schneider has made targeted acquisitions and sold off several underperforming divisions.
Nestle, Europe’s biggest listed company by market value, has been expanding its presence in faster-growing health and wellness products by snapping up firms like nutritional supplement provider Bountiful and hydration-tablet maker Nuun & Co.
According to reports, Nestle may well come back to its plans when it takes a look at how Haleon trades after its stock market debut.
Currently equity markets are volatile as investors dump stocks in record numbers.
The threat of a recession, creeping inflation and the ongoing war in Ukraine are spooking investors.
GSK declined to comment. Nestle did not respond to enquiries for comment.