Reckitt Benckiser revealed just before Christmas that it had entered into an agreement to sell its E45 brand and related sub-brands to Karo Pharma for £200m as part of its strategy to focus on higher-growth product areas.
For the financial year ended 31 December 2020, the E45 brands had a combined net revenue of £43m.
The proposed sale follows Reckitt’s recent divestments of its IFCN business in China and its Scholl brand, as well as the acquisition of Biofreeze.
Laxman Narasimhan, Chief Executive Officer of Reckitt, said: “E45 is an iconic, trusted skincare brand that over 60 years has become a leader in science-based skincare. As we shift from a brand-led to a category-led growth strategy, we are focusing on high growth categories with brands we can stretch into new places and spaces to support our medium-term growth ambitions, including 4-6% growth in Health.
“Now is the right time to pass E45 on to a new owner, and we are confident that Karo will build on the strength of the E45 brand to capture the significant opportunities ahead.”
The deal is expected to be completed in the second quarter of this year, subject to consultation with employee representatives in France.
Karo Pharma said the purchase includes Reckitt providing service and manufacturing support to the Swedish group for a limited period.
Reckitt benefited in 2020 from a pandemic-driven boom in demand for its hygiene products such as Dettol and Lysol. Its sales growth eased last year as Covid-19 vaccines shifted the focus away from hygiene. However, the company recently stated that its revenue for 2021 would come in higher-than-expected after benefitting from price hikes and stronger demand for its cold and flu remedies.
