Unilever involved in bidding war for Reckitt Benckiser’s food unit

Unilever is vying with Hormel Foods to buy Reckitt Benckiser’s food business in a deal which could be worth $2 billion. 

The Sunday Times first reported the deal, with both potential buyers facing competition from spice specialist McCormick and Birds Eye’s North American owner, Pinnacle Foods.

Consumer goods company Reckitt Benckiser confirmed a strategic review of its business in April, following the $17.9 billion acquisition of infant formula producer Mead Johnson.

Its food brands include French’s and Frank’s sauces and its food unit had sales of £411 million in 2016, but the company is increasingly focused on consumer health.

Unilever CEO Paul Polman confirmed in April that the business would investigate the viability of purchasing Benckiser’s food arm.

The proposed purchase comes six months after Unilever rejected a $143 billion takeover approach from Kraft Heinz, claiming it grossly underestimated its value.

Unilever responded with a major structural review which led to the sale of its spreads business, including brands such as Flora, Stork and Bertolli.

Its first quarter turnover was €13.3 billion – up 6.1%.