By Jason Theodorou
Household products and drugs group Reckitt Benckiser announced on Wednesday that it would buy SSL International, the makers of Durex condoms, for 2.54 billion pounds. Reckitt Benckiser said that the takeover marked a ’step change’ for their business.
Well established SSL brands such as Cillit Bang and Scholl footcare products will be brought under the same umbrella as Reckitt’s signature products, including Air Wick air fresheners and Nurofen headache tablets. Reckitt Benckiser also manufactures Vanish stain removers and Dettol surface cleaners.
Reckitt will pay 1163 pence per share for SSL, and will also pay a dividend to SSL investors. Gerald Corbett, chairman of SSL, said: ‘We felt that a price that is a 64% premium to the average share price over the last 12 months, and 35 times last year’s earnings, was worthy of consideration by our shareholders’.
SSL has had tremendous staying power despite the recession, in part by extending the Durex brand into sex toys. It has also taken over top-selling condom manufacturers in emerging markets to tap in to a lucrative demographic.
The takeover will almost certainly lead to efficiency savings and job cuts, which will impact SSL’s 10,000 employees around the globe. SSL operates in over 30 countries, and manufactures goods in China, Thailand and India. Reckitt employers 25,000 people globally and has it’s headquarters in Slough.
Reckitt Benckiser said in a statement that the deal would improve its business in China and Japan. Reckitt moved to the top of the FTSE 100 after the deal was announced, at £33.03 a share, while SSL’s shares rose 33.4% higher to £11.77 and ascended to the top of the FTSE 250.
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