Anglo-Dutch group Reckitt Benckiser is set to buy Durex condom maker SSL International, in an all-cash deal worth £2.54bn. Reckitt will pay £11.63 per share as well as a final dividend due to SSL's investors under the agreed takeover.
The FTSE 100 household goods company had raised a £2bn war chest for acquisitions last year, and the deal is expected to increase Reckitt's health and personal-care sales by about 36 per cent to £2.8bn.
The offer is a 32 per cent premium on the Tuesday closing price of SSL, which also manufactures Scholl footcare products. It saw a jump of 33 per cent on Wednesday, with shares trading at £11.84.
Reckitt, whose other brands include Cillit Bang, Strepsils, Vanish and Dettol, said the purchase would boost its business in China and Japan. Its shares opened 4 per cent higher at £33.29.
Both the companies, however, warned that the deal would likely lead to redundancies. SSL has about 10,000 employees worldwide, and Reckitt employs almost 25,000 people globally.
Deutsche Bank was the adviser to Reckitt for the deal, while JPMorgan Cazenove and Lazard advised SSL.