GSK/Pfizer reject Unilever’s £50 billion offer for consumer health unit

The duo hold out for an improved offer, deems Unilever’s offer to be “fundamentally undervalued”.

A £50 billion approach by Unilever for the consumer health unit jointly owned by GSK and Pfizer was rejected, after GSK’s shareholders deemed it as “fundamentally undervalued”. While Unilever sees the unit to be a “strong strategic fit” as it looks to reshape its extensive portfolio, it seems it would need to put forward an improved offer if it is to push through a deal as reports suggest that GSK and Pfizer are holding out for a £60 billion offer for the unit. GSK owns 68 percent of the joint venture, with Pfizer owning the rest. In recent years, GSK has increasingly come under pressure to sell off the unit, with hedge fund managers such as Elliot Management and Bluebell Capital Partners are among those pushing for a sale.

The British giant has reportedly received three offers from Unilever, with the latest coming on 20 December. The offer is said to have been a stock and cash deal, comprising of £41.7 billion in cash and £8.3 billion in Unilever’s stock. “The board of GSK therefore remains focused on executing its proposed demerger of the consumer healthcare business ... on track to be achieved in mid-2022,” according to a statement from GSK. GSK still intends to spin off the unit some time this year, should an improved offer not be received. Whether improved or not, should it pass, a deal of this size would be the biggest since the pandemic started. It would also position Unilever as a strong competitor alongside L’Oreal and Estee Lauder.