Unilever Eyes Monster $68.2 Billion GSK Takeover

Issue 106

Unilever the multinational consumer goods London-based company has placed a bid for the potential acquisition of GlaxoSmithKline for a total valuation of $68.26 billion.

The acquisition of GSK by Unilever comes out of a desire for the company to expand its product further into consumer health products of which GSK and Pfizer hold 32%. Unilever has high hopes for the acquisition as they believe that it would greatly expand their profit margins and help them recover from what has been a slow couple of years for many businesses, however, GSK and its stockholders have expressed serious concerns over the acquisition.

GSK has stated that the $68.26 billion bid is not enough to move forward with the acquisition and has requested that the bid reach $81.92 billion, Unilever has yet to respond to the request for higher payout, but chief executive Alan Jope has stated that “Please be assured Unilever will not overpay for any asset, particularly in the context where GSK consumer health is a very attractive option in the consumer health space. But it’s not the only option.”

Many of GSK’s shareholders are reluctant to sell to Unilever in which many of the shareholders expressed concern arguing that Unilever would be incompetent and unable to properly manage GSK.

With investor feedback regarding the acquisition being almost entirely negative, it is unclear at this time whether the deal will follow through. However, with Unilever's stock prices falling 7% Alan Jope is under increased pressure to ensure that the company improves its performance.

Source: Financial Times