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Last Updated: Friday, 7 October 2005, 07:05 GMT 08:05 UK
Reckitt Benckiser buys Boots unit
Packet of Strepsils throat lozenges
Reckitt Benckiser says it plans to grow the business
Reckitt Benckiser, the world's biggest maker of domestic cleaning goods, has agreed to buy the non-prescription drug business of High Street chemist Boots.

Reckitt will pay 1.93bn ($3.42bn) for the division, which owns brands Nurofen, Strepsils and Clearasil.

Boots has wanted to sell the business for some time and will return a large chunk of the cash to shareholders.

The sale will help smooth Boots's 7bn merger with European chemist and medicine supplier Alliance Unichem.

Cost savings

Reckitt Benckiser facts
1888 Reckitt & Sons list on London Stock Exchange
1938 Reckitt & Sons merge with J&J Coleman to form Reckitt & Coleman
1999 Reckitt & Coleman merge with Benckiser to form Reckitt Benckiser
Brands Lemsip, Vanish, Dettol, Harpic, Airwick, Veet, Calgon, Cillit Bang

As many as six companies had been bidding for Boots Healthcare International, but UK drugmaker GlaxoSmithKline and German medicine and chemicals firm Bayer dropped out of the running on Thursday.

The division was expected to sell for closer to 1.2bn and Reckitt Benckiser called the acquisition price "full".

However, Bart Becht, chief executive of Reckitt Benckiser, said that the acquisition would give the firm more exposure to a sector that was growing strongly and had good margins.

He also said that Reckitt Benckiser expected to wring out cost savings of 75m.

In afternoon trading on Friday, Boots shares were up 1.8% at 633 pence, after earlier touching 640 pence.

Meanwhile Reckitt was up 1.6% at 17.35, after shedding 1.8% on Thursday.



SEE ALSO:
Boots announces 7bn merger deal
03 Oct 05 |  Business
Intensive talks on Boots merger
02 Oct 05 |  Business
Boots set for merger with rival
01 Oct 05 |  Business
Six firms 'targeting Boots unit'
30 Sep 05 |  Business


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