Reckitt Benckiser Group PLC (LSE:RKT, ETR:3RB) has signed an agreement to divest its Essential Home business to private equity firm Advent International for an enterprise value of up to US$4.8 billion.
The FTSE 100 group will retain a 30% equity stake, but the said the deal was part of its strategy to become a more focused consumer health and hygiene company.
Reckitt expects to return around $2.2 billion to shareholders via a special dividend upon completion, in addition to its ongoing share buyback programme. The transaction also includes contingent and deferred consideration of up to $1.3 billion.
Essential Home, which includes well-known brands such as Air Wick, Calgon and Woolite, generated £2 billion in revenue in 2024.
Reckitt will transfer six manufacturing plants as part of the separation, with further changes planned.
CEO Kris Licht said: “We are executing our strategic plan at pace. The divestment of Essential Home represents a significant step forward in unlocking the substantial value in our business."
He said it would move the group "towards becoming a simpler, more effective" health and hygiene company focused on a core portfolio of high-growth, high-margin 'powerbrands'.
Advent managing partner Ranjan Sen said the deal "represents a unique opportunity to create a focused, scaled platform of globally recognised home care brands.
"We are confident we can build on the portfolio’s strong foundations to drive operational excellence and unlock the brands’ full potential."
Reckitt and Advent will enter into various transitional and manufacturing agreements to ensure a smooth operational handover. Completion is expected by the end of 2025, subject to regulatory approvals and employee consultations.