 Reckitt Benckiser says it plans to grow the business |
Reckitt Benckiser, the world's biggest maker of domestic cleaning goods, has agreed to buy the non-prescription drug business of High Street chemist Boots. Reckitt will pay �1.93bn ($3.42bn) for the division, which owns brands Nurofen, Strepsils and Clearasil.
Boots has wanted to sell the business for some time and will return a large chunk of the cash to shareholders.
The sale will help smooth Boots's �7bn merger with European chemist and medicine supplier Alliance Unichem.
Cost savings
 | Reckitt Benckiser facts 1888 Reckitt & Sons list on London Stock Exchange 1938 Reckitt & Sons merge with J&J Coleman to form Reckitt & Coleman 1999 Reckitt & Coleman merge with Benckiser to form Reckitt Benckiser Brands Lemsip, Vanish, Dettol, Harpic, Airwick, Veet, Calgon, Cillit Bang |
As many as six companies had been bidding for Boots Healthcare International, but UK drugmaker GlaxoSmithKline and German medicine and chemicals firm Bayer dropped out of the running on Thursday.
The division was expected to sell for closer to �1.2bn and Reckitt Benckiser called the acquisition price "full".
However, Bart Becht, chief executive of Reckitt Benckiser, said that the acquisition would give the firm more exposure to a sector that was growing strongly and had good margins.
He also said that Reckitt Benckiser expected to wring out cost savings of �75m.
In afternoon trading on Friday, Boots shares were up 1.8% at 633 pence, after earlier touching 640 pence.
Meanwhile Reckitt was up 1.6% at �17.35, after shedding 1.8% on Thursday.
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