AHP TIGHTENING HEALTHCARE FOCUS WITH SALE OF HOUSEHOLD PRODUCTS
Executive Summary
AHP TIGHTENING HEALTHCARE FOCUS WITH SALE OF HOUSEHOLD PRODUCTS business worldwide under an agreement in principle with the British firm Reckitt & Colman, announced March 9. American Home Products said the purchase price for the Boyle-Midway (the U.S. arm) and Whitehall-Boyle International household products group is $1.25 bil., which translates into nearly twice the group's 1989 sales of $650 mil. Reckitt & Colman is an international consumer products company; the firm had 1988 sales of $2.5 bil. (U.S. dollars) and earnings of $214 mil. The proposed divestiture, which will help allay the cost of the $3.2 bil. A. H. Robins acquisition, consummated on Dec. 15, underscores the reputation of AHP as a company ever concerned with the bottom line; however, the restructuring also is another sign of American Home's increasing commitment to being a full-range health care company. The agreement-in-principle leaves AHP with its American Food Products Division as the only non-health care related unit. AHP's food business (Chef Boyardee, Jiffy Pop, Gulden's mustards, Wheatena and Maypo) is mostly in the U.S. and Canada and generated $731.4 mil. in revenues in 1989. The food business is the company's second largest operation behind prescription and consumer drug health care which, together, accounted for about three-quarters of AHP's $6.75 bil. in 1989 sales. The proposed deal does not cover the rights to Pam cooking sprays and Butter Buds food products, which are currently part of Boyle-Midway.
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