Household goods firm pays £1.1bn for US drug maker

UK household goods firm Reckitt Benckiser is expanding its healthcare operations in North America after today agreeing a £1.1bn (€1.5bn) takeover of a US cough mixture firm.

UK household goods firm Reckitt Benckiser is expanding its healthcare operations in North America after today agreeing a £1.1bn (€1.5bn) takeover of a US cough mixture firm.

The Anglo-Dutch company has agreed a $60 dollars-a-share offer for Nasdaq-listed Adams Respiratory Therapeutics, in a deal which will see it enter the US healthcare market for the first time.

Reckitt will take ownership of brands such cough medicine Delsym and decongestant Mucinex, which are both sold over the counter in US pharmacies, and the products will bolster its existing healthcare range, which includes Strepsils and Nurofen, acquired in a £1.93bn (€2.68bn) buyout of Boots Healthcare International last year.

Reckitt also owns brands such as Lemsip, Disprin and Gavescon as well as well-known household products Cillit Bang, Dettol detergent and Calgon water softener.

Bart Becht, Reckitt Benckiser chief executive, said the deal was a “step forward” in the company’s consumer healthcare strategy.

“The growth potential of the business, the importance of gaining an entry in the USA healthcare market and the synergies available make Adams a very attractive addition to our portfolio.

“We have already shown with the acquisition of Boots Healthcare International that we can generate shareholder value in consumer healthcare.”

Mr Becht said the deal, which is being funded from existing facilities, was expected to be immediately earnings enhancing excluding a $60m (€40.7m) restructuring charge.

The company, which employs 500 staff, is based in New Jersey and has a manufacturing site in Texas.

Reckitt said it saw the potential for international expansion of Mucinex from 2010, while the launch of new products would also underpin growth.

It added there was scope for “substantial” cost synergies from the deal and investors today welcomed the buyout, sending Reckitt’s shares 1% higher.

The takeover remains subject to anti-trust approval in North America but Reckitt said it expected the deal to be passed.

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