Reckitt Benckiser steal Schiff acquisition from under the nose of Bayer

Reckitt Benckiser has added a large US vitamins company to its bathroom cupboard of various products that include Strepsils and Gaviscon. The company made a £877m deal that is the first large acquisition since new chief executive Rakesh Kapoor came to power. German company Bayer had agreed originally to purchase Schiff Nutrition International, but Reckitt sneaked in a surprise bid last week and won the deal.

Other major brands owned by Reckitt Benckiser include Durex condoms, Cillit Bang cleaner, and Clearasil spot cream. Now they can add almost $30b worth of nutrition pills and vitamins to their brand. Specific products that were included in the Schiff deal include 3D Cleanse, Move Free for joints, International Cleanse Program, and Tiger’s nutrition bars.

Both pharmaceuticals and consumer businesses have been trying to diversify their portfolios in the over the counter health care market, but it is expensive to do so as Reckitt is paying almost 16 times more than Schiff is expected to make next year. In addition, they will have to pay an additional $22 billion to Bayer since they broke-up the previous sale deal that was already agreed to.

Kapoor still defended the purchase stating that the Schiff portfolio will be a great fit for their new focus on hygiene and health within the marketplace. He added that the company wants to synergise as quickly as possible and are very excited to enter the billion pound market that includes minerals, vitamins, and supplements. Analysts believe that this is likely just the first of many deals that Kapoor will complete now that he is in the chief executive’s chair.