Reckitt has agreed to sell a majority interest in its Essential Home division to Advent International in a $4.8 billion transaction, including debt, as the consumer goods firm works to streamline operations and boost shareholder returns.
The deal, announced Friday, will see Reckitt retain a 30% stake in the unit—home to brands like Air Wick, Cillit Bang, and Mortein. The company expects to return roughly $2.2 billion to investors through a special dividend and a share consolidation once the transaction closes later this year.
The sale is part of CEO Kris Licht’s broader push to refocus the company amid weakening brand strength in North America and Europe. Essential Home accounted for 13% of group revenue in the first quarter but has posted sluggish sales in recent quarters.
Shares rose as much as 2.3% in early trading before trimming gains. Analysts said the transaction was key for management credibility, though some questioned the financial terms.
“This was a deal Reckitt needed to get done,” said James Edwardes Jones of RBC, while noting the valuation was underwhelming.
JPMorgan analysts flagged the remaining stake as a risk, leaving Reckitt exposed to the division’s future performance. The company is also evaluating options for its troubled Mead Johnson baby formula unit.
