LONDON: Reckitt Benckiser Group plc announced Friday it will divest its Essential Home business to Advent International in a deal valued at up to $4.8 billion, marking a key milestone in Reckitt’s strategic shift toward a leaner, consumer health-focused portfolio.
As part of the transaction, Reckitt will retain a 30% equity stake in Essential Home, positioning the company for potential long-term value creation. The agreement includes up to $1.3 billion in contingent and deferred consideration, and Reckitt expects one-off costs of about $800 million, primarily related to the business separation.
The move aligns with Reckitt’s July 2024 strategy to focus on 11 high-margin “Powerbrands,” streamlining its global operations to become a more agile player in health and hygiene. Essential Home—whose brands include Air Wick, Calgon, Woolite and Cillit Bang—generated approximately £2 billion in revenue last year, accounting for 14% of Reckitt’s total revenue.
Reckitt will return excess capital to shareholders through a special dividend of approximately $2.2 billion and continue its share buyback program. Completion is expected by year-end, pending regulatory approvals and employee consultations.
“We are executing our strategic plan at pace,” CEO Kris Licht said. “Essential Home will thrive under Advent’s ownership, and our minority stake preserves upside potential for Reckitt.”
Advent Managing Partner Ranjan Sen called the carve-out a “unique opportunity” to build a global home care platform with structural growth tailwinds.
Essential Home includes six manufacturing sites and will operate under transitional and supply agreements with Reckitt following the closing of the deal.