GSK turns down Unilever takeover bid three times

CONSUMER
GSK turns down Unilever takeover bid three times

What’s going on?
Over the weekend it was revealed that not once but three times, Unilever has unsuccessfully bid for GlaxoSmithKline’s (GSK) consumer healthcare division. The latest offer came just before Christmas and was worth £50bn, if accepted it would have been one of the largest deals ever between two FTSE 100 companies.

Why is this important?

GSK is one of the world’s biggest drugs companies making a wide range of prescription medicines, vaccines and consumer healthcare products.

But in recent times its lagged behind rivals like AstraZeneca and Pfizer in its sales and revenue growth. On top of that it still doesn’t have a Covid vaccine on the market. All of this has led shareholders to call for a shake up at the company.

Last year it announced that it would separate its consumer healthcare division, which makes brands like Aquafresh, Sensodyne and Panadol, from its vaccines and medicine division so it can throw more weight behind getting better results in research and development. 

So an approach from consumer goods giant Unilever, which owns a suite of brands including Marmite, Dove and Cornetto, would seem like a great strategic fit. However GSK believes the £50bn offer undervalues its consumer healthcare division and the potential cost savings that could be made with a takeover.

Unilever already has a lot on its plate, it's facing growing pressure from shareholders after missing sales and profit targets, and its shares have lagged behind those of its peers. 
 

RETAIL
Shortage of electronic goods hit Currys Christmas sales

Supply issues with popular Christmas gifts like Playstations, Dyson hairdryers and iPhones led to a 5% drop in sales for Currys over the crucial festive period.

The UK’s biggest electronics retailer, which has 800 stores in seven countries, also experienced weakened demand from consumers. It reported that the overall tech product market fell 10% at Christmas as household finances came under increasing pressure due to the decade-high inflation rate.

On the bright side, performance of gaming products reached a new high as virtual reality gaming went mainstream. The company reported huge orders for VR headset Oculus Quest 2 and the PS5.

Currys is expecting a bumpy year ahead. Concerns over the cost of living and recent Omicron wave has dented consumer confidence particularly when buying bigger ticket items. As a result the company has trimmed its profit forecast for this year by £5m to £155m.