Reckitt Says Chance of Big M&A ‘extremely remote’
Bart Becht, Chief Executive of consumer goods group Reckitt Benckiser, says the chances of big takeover deals are "extremely remote" in his industry, despite recent talk of a link-up with Colgate-Palmolive.
Last November, speculation mounted about the two groups getting together, although analysts were skeptical while senior executives of both declined to comment.
"Industry consolidation is extremely remote in our space," Becht told the 2009 results news conference on Wednesday, declining to comment about Colgate. "From time to time we will look at add-on acquisitions, but the focus is still on organic growth," he said.
Pressure for Reckitt to do deals is likely to mount after it paid off its debt of £1.1 billion at end-2008 to move to net cash of £200 million by end-2009, analysts said. Finance Director Colin Day said the group had increased dividend payments for 2009 to 100 pence, or 50% of its 194.7 pence earnings and did not plan share buyback or special dividend, leaving add-on acquisition as a use for its cash.
A potential Reckitt-Colgate deal would have linked up the British group's products like Finish dishwashing products, Lysol disinfectants and Cillit Bang cleaners with Colgate's namesake toothpaste, toothbrushes and dishwashing soap.
