Unilever signalled on Monday it would pursue a deal for GlaxoSmithKline's consumer health business, calling it a "strong strategic fit" after its £50-billion- ($68.4 billion) offer was rejected, sending its shares down 6%.
GSK confirmed over the weekend that it had rejected the Dove soap maker's bid for its consumer healthcare business, which is home to brands such as Sensodyne toothpaste and Emergen-C vitamin supplement.
GSK Shares Jump
GSK shares jumped 5% in early trading.
"The acquisition would create scale and a growth platform for the combined portfolio in the U.S., China and India, with further opportunities in other emerging markets," Unilever said, pointing to synergies in the oral care and vitamin supplements business.
GSK said on Saturday Unilever's offer "fundamentally undervalued" the business, adding that it would stick to its plan of listing the business this year.
The GSK consumer business, in which U.S. drugs company Pfizer owns a 32% stake, has annual sales of almost £10 billion.
Additional Financing
Unilever held talks with banks about additional financing for a potential sweetened offer for, Bloomberg News reported on Sunday, citing people familiar with the matter. Unilever did not immediately respond to a Reuters request for comment on the talks.
The Marmite maker, which is set to announce an initiative later this month to strengthen its business, said on Monday it was committed to "strict financial discipline" for any acquisitions.
Unilever also said any major acquisitions would be accompanied by the divestment of lower margin businesses or brands.
News by Reuters edited by Donna Ahern, Checkout. For more A Brands stories click here. Click subscribe to sign up for the Checkout print edition.
