Reckitt to revamp after poor sales growth

LONDON: Reckitt Benckiser has decided to split its business into two units - consumer healthcare and home and hygiene products - the British consumer goods company said, after warning that there would be no growth in sales this year.

The maker of a wide range of products, including Durex condoms and Lysol disinfectants, is on track for uncharacteristically poor results this year and has blamed slowing markets, changing consumer habits, a cyber attack, a failed product launch and a safety scandal in South Korea.

Reckitt said to help boost performance it would operate from two business units from the start of 2018. Chief Executive Rakesh Kapoor said the restructuring decision was made after the acquisition in June of baby milk maker Mead Johnson, its biggest ever acquisition.

Kapoor also denied the move was a precursor to exiting any business, even though analysts have speculated that Reckitt could sell its home products brands to help fund a purchase of Pfizer’s consumer healthcare business, which the US pharmaceutical company has said it may sell. Reckitt is no stranger to selling off businesses. It spun off the drug addiction treatment company Indivior in late 2014 and sold its food business for $4.2 billion in August. Kapoor said that if Pfizer goes ahead with a sale, he would look at the business, which may be worth some $15 billion. Analysts have questioned whether Reckitt has the financial and managerial capacity for such a big deal so soon after the $16 billion purchase of Mead Johnson. — Reuters