Consumer goods company Reckitt is divesting from several household cleaning brands
The British consumer goods conglomerate Reckitt is putting its business with baby food and other brands on display. By the end of 2025, the company intends to divest from several household cleaning brands that no longer belong to the core business, including Calgon, Cillit Bang, and Air Wick, Reckitt announced on a Wednesday. The strategic options for the baby food manufacturer Mead Johnson are also being explored. Reckitt aims to significantly sharpen its portfolio and simplify the organization to accelerate growth and value creation, said CEO Rakesh Kapoor.
In the future, the company intends to focus more strongly on its health and hygiene products with growing brands such as Nurofen pain relievers, Vanish stain removers, or Durex condoms. Mead Johnson was acquired by Reckitt for $16.6 billion in 2017 and entered the baby food industry. However, issues such as product recalls and concerns about a potential wave of lawsuits related to baby food Enfamil have weighed on the company.
A jury in Illinois ordered Mead Johnson to pay $60 million to the mother of a premature baby who died from necrotizing enterocolitis (NEC), a disease that primarily affects premature infants, after being fed Enfamil. The jury found that Mead Johnson had acted negligently and failed to warn of the risk of NEC - a condition that has been alleged to be caused by Enfamil and Similac products from competitor Abbott in hundreds of pending lawsuits. Top investors and analysts are pressuring the company to sell the division.
Reckitt, in its pursuit to streamline its operations, has identified Calgon, Cillit Bang, and Air Wick as household cleaning brands to be divested from by 2025, as stated by CEO Rakesh Kapoor. This decision is part of Reckitt's plan to focus on its health and hygiene products, such as Nurofen and Durex, while also exploring strategic options for its baby food Manufacturer, Mead Johnson.
The selling pressure on Mead Johnson has intensified following a $60 million jury verdict against the company in an Illinois court. The case involved a premature baby's death after being fed Enfamil, a Mead Johnson product, which was found to have been negligently produced and insufficiently warned about the risk of necrotizing enterocolitis (NEC).
As concerns over Enfamil and potential lawsuits related to NEC continue to mount, top investors and analysts are urging Reckitt to divest from the baby food division, which it acquired for $16.6 billion in 2017. This divisive move could potentially help Reckitt, a prominent consumer goods conglomerate, to refocus its resources on its core health and hygiene products, such as Calgon alternatives or substitutes for Air Wick wicks.
Reckitt's announcement to sell or redefine the roles of several iconic brands, including Calgon and Air Wick, could open up opportunities for other consumer goods companies interested in expanding their health and hygiene portfolio, which is garnering significant attention in today's market.
