Reckitt Benckiser Group Plc has begun a sale process for its infant nutrition business in what’s set to be one of the British consumer goods firm’s largest-ever disposals, people with knowledge of the matter said.
The London-listed company, which sells brands including Enfamil formula, sent out marketing materials to potential buyers this month, the people said. Reckitt could seek as much as $10 billion for the unit, according to the people, who asked not to be identified because the information is private.
Bids for the business, whose biggest operations are in the U.S., are expected at the end of May, the people said. It could attract interest mostly from private equity firms, the people said.
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A sale would complete a reversal of Reckitt’s largest purchase, the $17 billion acquisition of Mead Johnson Nutrition Co. five years ago under former Chief Executive Officer Rakesh Kapoor. His successor, Laxman Narasimhan, sold the Chinese infant formula part of that business to local buyout firm Primavera Capital for $2.2 billion last year, exiting one of its largest markets.
The company said at the time that the remaining operations in North America and other parts of the world had about 5.4 billion pounds ($7.3 billion) of net assets.
Goldman Sachs Group Inc. is advising Reckitt on the sale, the people said. Deliberations are ongoing, and there’s no certainty they will lead to a transaction. A representative for Reckitt declined to comment, while a spokesperson for Goldman Sachs didn’t immediately comment.
Shares of Reckitt have fallen about 5% over the past 12 months, giving the company a market value of 45 billion pounds. The Slough, England-based company forecast in its quarterly earnings in February that profit margins would increase this year despite significant commodity cost pressures that have led rivals to warn about slowing growth.
Reckitt said this month it had begun a process to shift ownership of its Russian business, which may include a transfer to a third party or its local employees.
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