RECKITT BENCKISER (RB) chief has decided not to split its business.
Earlier, market experts widely expected the British multinational consumer goods company to spin off its hygiene and home business.
RB’s chief executive Laxman Narasimhan has scrapped the plans to split the business after making an announcement a year ago.
Narasimhan, who joined the Slough-based group last year, abandoned the “Reckitt 2.0” strategy introduced by former RB boss Rakesh Kapoor.
Earlier, it was widely expected the business would spin off its hygiene and home business, which includes brands such as Vanish stain remover and Dettol disinfectant.
The company will now focus on increasing investment in the group’s brands.
Narasimhan said in a statement last week that recent years had been difficult for his business but the company “operates in strong, structural growth categories and has an outstanding collection of trusted, market-leading brands”.
He plans to invest £2bn over the next three years, including this year in digital, customer service, and innovations. It means that 2020 would be a “transitional year”.
The investment will also aim to boost its presence in China and improve its e-commerce business.
RB will focus on hygiene, health and nutrition and plans to increase from 75 crore category market units to 100.
Adrian Hennah, chief financial officer at RB, said: “In light of the revised strategic direction… we will not be incurring some of the expenditure previously envisaged under the RB 2.0 programme. We expect a reduction of around £30m to £35m on the originally planned £450m.”
Narasimhan has also merged the home and hygiene units to sit under one single hygiene division.
He also created a new nutrition arm that will house its infant formula brands Enfamil and Nutramigen.
RB inherited the brands after acquiring Mead Johnson in 2017 - a deal that has proved costly and forced a £5bn writedown last week.
According to the company sources, Hygiene home will remain with the group as the new hygiene division, and RB 2.0 has been abandoned.
Narasimhan, 53, grew up in India. He holds a degree in mechanical engineering from University of Pune, India. He also has an MBA in finance from the Wharton School at the University of Pennsylvania.
Earlier, he was PepsiCo’s global chief commercial officer. Before joining the American multinational giant in 2012, he spent nearly two decades working as a consultant at McKinsey.
An aerial view of the British Steel Scunthorpe site on September 13, 2024. (Photo: Getty Images)