Proactive Investors - Reckitt Benckiser (LON:RKT) could return up to £12.5 billion to shareholders, about 40% of its market value, as part of a major strategic overhaul, according to Barclays (LON:BARC).
The company plans to shift from a category-first model to a geography-first approach, with asset sales playing a key role. Reckitt is expected to divest Essential Home and Mead Johnson Nutrition, which together made up 30% of sales and 25% of earnings last year.
The proceeds from these sales are likely to be returned to shareholders, potentially boosting earnings per share to £3.50 by 2027, the investment banking arm of the high street lender said.
While the strategy aims to streamline the company and enhance growth, Barclays notes that shrink-to-grow approaches can be risky.
Reckitt will need to manage these changes carefully, especially as it seeks to cut 300 basis points in fixed costs without operational disruptions. Investors are watching closely as the company embarks on this transformation, the bank concludes.
In late morning trading, the shares were off 0.7% at 4,543p.