- Reckitt Benckiser (OTCPK:RBGPF) (OTCPK:RBGLY) receives regulatory clearance from the UK's Competition and Markets Authority (CMA) to purchase Johnson & Johnson's (NYSE:JNJ) K-Y intimate lubricant business with the proviso that it license the brand to a third party for eight years. During this period, the company selling K-Y would create its own brand, after which Reckitt would resume control of K-Y.
- Reckitt agreed to buy K-Y last year but encountered opposition from UK authorities who said the deal would reduce competition and result in higher prices for consumers. The CMA asked the company put forward measures to allay their concerns, but its initial proposals were unsuccessful.
- The company's plan to purchase the K-Y business in New Zealand was also blocked due to anti-competitive concerns. Reckitt chief Rakesh Kapoor isn't too concerned since the bulk of K-Y sales come from the U.S., Canada and Brazil.
- Under Mr. Kapoor, Reckitt is moving into higher margin consumer health products. The strategy appears to be working. H1 comps were up 13%.
U.K. clears Reckitt Benckiser's buy of J&J's K-Y business
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