Unilever ADRs Drop After Approach for Glaxo's Consumer-Health Business
19 January 2022 - 2:56AM
Dow Jones News
By Robb M. Stewart
Unilever PLC's U.S.-listed stock retreated Tuesday as investors
reacted to the company's efforts to push further into health,
beauty and hygiene products with a $68 billion approach for
GlaxoSmithKline PLC's consumer-health business.
In morning trading, the American depositary receipts were 11%
lower at $48.41. They now stand down 10% in the new year, and 19%
weaker over the last 12 months.
The maker of Dove soap and Ben & Jerry's ice cream over the
weekend said it made a takeover approach for the business, which is
68% owned by Glaxo and 32% by Pfizer Inc. If successful, it would
be Unilever's biggest-ever acquisition and the company said it
would be accompanied by significant divestitures as it looks to
shift its portfolio toward higher-growth categories.
Fitch Ratings on Tuesday cautioned an acquisition of the
consumer-health business is likely to raise Unilever's debt to a
level the company wouldn't be able to reduce it sufficiently to
maintain an A rating category over 2024-2025, which could open the
door to a multi-notch downgrade into the BBB category. Fitch said
it believes Unilever's offer would need to be raised to be
successful, given Glaxo's refusal to consider it, resulting in a
further deterioration of the company's expected credit metrics.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
January 18, 2022 10:41 ET (15:41 GMT)
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