Consumer goods giant Reckitt Benckiser Group PLC, London, owner of America’s best-selling mustard, French's, is said to be strategically reviewing its food business, and exploring "all options" for the French's unit as it seeks to close its $16.6-billion takeover of baby food maker Mead Johnson Nutrition Co.
French’s, which also includes Frank’s RedHot pepper sauces and Cattlemen's barbecue sauces, generated $513.4 million of the company's overall revenue in 2016. Reckitt didn't provide further details except to say the unit was no longer considered core.
Analysts reportedly estimate the food unit could be worth $2.5 to $4 billion. The news comes as several consumer-goods giants are re-evaluating slower packaged-food businesses and increasingly moving toward higher-margin health and household goods.
Reckitt's purchase of Mead Johnson stands to nearly double the size of its consumer-health business, and will push the Slough, England, company deeper into emerging markets. Reckitt's CEO Rakesh Kapoor attempted to buy Merck & Co.'s consumer business in 2014, but lost a bidding war to Bayer AG, and since has been searching for a major acquisition.
French's is said to be managed separately from the remainder of Reckitt Benckiser's business, which is mainly devoted to cleaning products, over-the-counter remedies, health and beauty aids like Veet hair-removal cream and other products.