(Reuters) – British consumer goods maker Reckitt is facing pressure from major shareholders to reconsider selling its Mead Johnson Nutrition business following legal challenges and other setbacks at the division, the Financial Times reported on Wednesday.
Reckitt bought US infant formula maker Mead Johnson Nutrition for $16.6 billion in 2017 but is currently trying to overturn a $60 million judgment in a lawsuit after a jury ordered the company to pay damages to the mother of a premature baby who died from intestinal disease after feeding it Enfamil formula.
The company said it faces “contingent liabilities” that depend on future events due to product liability lawsuits filed in the United States against Mead Johnson.
Portfolio managers at Frossbach von Storch, Reckitt’s third-largest shareholder, and Causeway Capital Management, a top 10 shareholder, told the Financial Times they were open to Reckitt selling the unit.
“The nutrition business is not a good strategic fit so we would welcome the business finding a new owner,” Simon Jaeger, portfolio manager at Flossbach von Storch, said, according to the Financial Times.
“Reckitt has decided that the nutrition business does not fit into its future,” a portfolio manager at Causeway Capital Management told the Financial Times.
Reckitt, Flossbach von Storch and Causeway Capital Management did not immediately respond to Reuters requests for comment.
Reckitt’s shares have fallen about 19% this year.
(Reporting by Devika Nair in Bengaluru; Editing by Sonia Cheema)
