There is a long way to go between planning a project, execution and the outcome. When it comes to global giants, that path seems to be shorter. Just seems. Let Unilever say so. The British consumer goods multinational planned to buy GlaxoSmithKline’s Consumer Health (GSK) business and played its part. In fact, three cards. The three rejected by the country’s pharmaceutical company. The bid amounted to $68.1 billion (£50 billion). Still, it did not seduce the owner of brands such as Sensodyne toothpaste, the vitamin supplement Emergen-C, the multivitamin Centrum, the antacids Eno and Sonrisal, the denture fixer Corega and the pain reliever Advil. The plan stopped in execution.
But the initial results have already emerged. Still primary and natural in the face of an operation of this size. Unilever shares are down 8% earlier in the week, while GSK shares are up 6%. It doesn’t matter, since with each trade update this volatility swings to one side or the other. We actually have the positions of the companies. Unilever maintains the offer and does not intend to do anything crazy to make the acquisition possible, which would place it in an even more prominent position on the global stage, with growth in the combined portfolio, mainly in China, the United States and India, as well as opportunities in other emerging markets. , like Brazil. In a statement, CEO Alan Jope’s company said it was committed to “strict financial discipline” for any M&A (mergers and acquisitions). He also stressed that agreements that are signed now or later will be accompanied by the divestment of businesses or brands with lower margins.
US$ 81.7 billion is the amount that analysts consider fair for the advancement of negotiations
In the other trench of the negotiation, GSK, led by Emma Walmsley, hired financial groups Goldman Sachs and Citigroup to review Unilever’s approach. Initially, the company’s conclusion is that the proposal “fundamentally undervalued” the consumer business, which has a 32% stake in American pharmaceutical Pfizer. Experts from Europe and the United States point out that increasing the supply to US$ 81.7 billion (60 billion pounds) could generate synergy. The negotiation can still work out. But for now, Unilever bought the beginning of a war, which for now has only given a headache.
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