Unilever wants the attractive cash flow and growth from GSK’s joint venture with Pfizer (4-6% is the GSK unit’s target, although many think that’s a bit ambitious).

Unilever CEO Alan Jope is under pressure to grow the business after a lackluster few years – a mega-deal highlights the difficulty of fixing the core business and/or lack of ideas. Terry Smith – boss of Fundsmith, one of the major shareholders – says the company has “clearly lost track” (in his annual letter to shareholders).

GSK CEO Emma Walmsley is also under pressure, including from activist investors, to bolster the company’s drug pipeline; a particularly acute concern having missed a covid vaccine.

Debt may prevent Unilever from going much higher; the company leveraged itself after Kraft-Heinz’s bid to ward off leveraged buyers… ironic that this could prevent it from closing a deal. Other suitors, including private capital, may step in to kill him.

Does Unilever want it enough? I do not think so. More pressing things to consider…like the purpose of mayonnaise. It feels like bringing together two rather slow-growing consumer staples companies, which leaves scale/synergies as the key to success…but you still have all the debt to pay off.