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European deal cleans up
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July 27, 1999: 4:38 a.m. ET
Reckitt & Colman and Benckiser create world's biggest cleaning-products maker
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LONDON (CNNfn) - Britain's Reckitt & Colman and Benckiser of the Netherlands unveiled a merger Tuesday which creates a detergents giant valued at 4.9 billion pounds ($7.7 billion).
Reckitt stock soared almost 10 percent to 761 pence in London after the deal was announced, and Benckiser shares jumped nearly 5 percent in Amsterdam to 55.30 euros.
The new Reckitt Benckiser will be the world's largest household cleaning products company - excluding laundry detergents - with annual revenue of 3.12 billion pounds in 1998.
Under the terms of the all-stock deal, Reckitt shareholders will own 59 percent of the new group and Benckiser investors will own the remainder. The new company will be listed on the London Stock Exchange.
Reckitt stock has sharply underperformed the London market over recent years, and in February the group parted company with chief executive Vernon Sankey.
Following the deal, which has yet to be voted on by shareholders at either company, the groups claim they will be able to generate cost savings of 75 million pounds from 2001.
The new group will possess a range of household cleaning brands, including Calgon, Spray'n Wash and Lysol.
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