UNILEVER TO SHARPEN HEALTH FOCUS AFTER GSK CONSUMER INTEREST

MUMBAI: Unilever Plc plans to sharpen its focus on health and hygiene and plans to sell off slow-growth brands as it weighs making a higher offer for GlaxoSmithKline Plc’s consumer unit.

Unilever said Monday it will announce a revamp of its structure later this month. The Dove soap owner said it will refocus around its health, beauty and hygiene operations, suggesting divestitures may involve its food operations, which include the Ben & Jerry’s and Magnum ice cream brands.

The strategy shift comes after Glaxo said over the weekend that it rejected three offers from the consumer-products company for a bundle of brands including Advil painkiller and Sensodyne toothpaste, the latest of which was worth 50 billion pounds ($68 billion).

Shares of Unilever fell as much as 6.6% in London. Glaxo rose as much as 5.9%.

Alan Jope is aiming to make his biggest changes at Unilever since becoming CEO three years ago. With analysts valuing the Glaxo consumer business at as much as 48 billion pounds, any successful offer from Unilever would likely have to include a significant premium over that level, as well as a consideration of synergies, to tempt Glaxo away from the spin-off plan, which is already at an advanced stage.

Unilever has held talks with banks about additional financing for a potential sweetened offer for the Glaxo unit, according to people familiar with the matter. Some financial firms have discussed lending enough for a higher bid. Unilever hasn’t made a final decision on using the firepower, said the people, who requested anonymity as they aren’t allowed to speak publicly.

Glaxo has been planning to spin off its consumer brands, but shareholders including Elliott Investment Management LP have been pushing Chief Executive Officer Emma Walmsley to consider a sale instead. The drugmaker said over the weekend it’s sticking with plans to spin off the portfolio.