Strategic Realignment: Reckitt Considering Sale of Mead Johnson and Homecare Brands

Reckitt has initiated a strategic review of its baby food business Mead Johnson and announced plans to sell a large portfolio of its household brands, including Air Wick and Cillit Bang. The company aims to streamline its operations and enhance efficiency. Going forward, Reckitt will report three business segments: the main segment Reckitt, which includes the top-selling brands such as Nurofen and Gaviscon; Essential Home, which covers the lower growth segment brands in household care; and Mead Johnson, the baby food company facing legal challenges in the US. The sale of the household portfolio, generating revenues of £1.9 billion, and a potential sale of Mead Johnson would leave Reckitt with net revenues of £10 billion, compared to £14.6 billion for the entire group in 2023. Reckitt finds itself in a similar position to Unilever last year and aims to focus on its high-growth, high-margin "Power Brands," with the Mead Johnson business described as "non-core." The company emphasized that it is exploring all strategic options to maximize shareholder value. Additionally, Reckitt plans a reorganization and cost-saving program, which will incur one-time costs of £1 billion. The group also lowered its revenue expectations for this year and forecasts revenue growth of 1 to 3 percent for 2024, down from the previously expected 2 to 4 percent.