Reckitt advances sale of Mead Johnson infant-formula business

LONDON – Reckitt Benckiser, a London-based consumer goods company, is pushing ahead with plans to sell its nutrition division, which includes the Mead Johnson infant-formula business. 

Reported by company officials, the sale could potentially be finalized within the 2025 fiscal year. CEO Kris Licht revealed last week that the company has already attracted interest from prospective buyers, signaling a smooth progression in the disposal process. 

The decision comes as Reckitt shifts its focus toward its core brands in consumer health and hygiene, such as Durex and Finish dishwasher products.

The nutrition division, acquired by Reckitt in 2017 for US$17.9 billion, has been labeled “non-core” by Licht since July. 

Alongside Mead Johnson, the company is also looking to offload its essential home division.

Despite being the smallest revenue contributor compared to the hygiene and health units, the nutrition business remains part of Reckitt’s financial outlook for 2025, with projected group-wide like-for-like sales growth of 2-4%. 

During a recent analyst briefing following the 2024 results, Licht provided an update on the divestitures.

 “On the process, I’d love to be able to say more, but where we are doesn’t lend itself for me to be overly specific. What I can say is the overall process is on track, and I’m feeling good about it,” he stated.

Reckitt reported a modest 1.4% like-for-like revenue increase across its business groups in 2024, reaching US$18.3 billion. 

However, nutrition sales dropped by 7.3% to £2.15 billion, while hygiene rose 4.2% to £6.14 billion, and health grew 2.1% to £5.88 billion. 

The decline in nutrition sales was linked to supply issues in North America following a tornado that struck Mount Vernon, Indiana, in July of the previous year. 

Looking ahead, CFO Shannon Eisenhardt forecasted low single-digit growth for both the nutrition and essential home segments in 2025, with stronger performance expected in the second half of the year.

After the disposals, Reckitt aims to prioritize its core portfolio, setting a like-for-like growth target of 3-4% for 2025. 

Licht expressed optimism about the nutrition unit’s future, saying, “On Mead Johnson nutrition, the team has responded well to the challenges it has faced in 2024. We continue to defend ourselves against all cases in the ongoing litigation.” 

This statement alluded to ongoing legal challenges in the United States, where Reckitt faces lawsuits over alleged health risks tied to its Enfamil Premature 24 formula. 

A report by Barclays analysts last July suggested around 400 cases could be pending, following a US$60 million damages award in March 2024 to a mother whose baby died from necrotizing enterocolitis (NEC) after consuming the formula. 

The Illinois court ruling found Mead Johnson negligent for not warning about NEC risks. 

While Licht acknowledged the litigation last week, he offered little detail, focusing instead on the company’s confidence in achieving growth in the coming year.

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