Pure interest: a contender has been found for the manufacturer of Durex and Vanish in Russia

Billionaire Viktor Kharitonin's structures (Pharmstandard Holding) have become interested in the Russian assets of Reckitt Benckiser, the world's largest manufacturer of household chemicals (brands Durex, Vanish, Tiret, Calgon, etc.), Izvestia has learned. The British company is one of the world's largest players in the category of consumer goods (FMCG). Kharitonin has been interested in this segment for a long time. In 2024, as part of a consortium of investors, he bought out the Russian business of German Henkel for 54 billion rubles. Experts estimate Reckitt Benckiser's assets in Russia at 30-40 billion. Izvestia investigated how the household chemicals market in the Russian Federation might change.

What is known about the British company's business in Russia

Viktor Kharitonin's structures (owner of Pharmstandard Holding, 24th in the Forbes ranking with a fortune of $7.9 billion) are interested in buying the Russian business Reckitt Benckiser. A top manager of a large pharmaceutical company and an investment banker who worked on the British side told Izvestia about this; the information was also confirmed by an interlocutor close to the potential buyer. A Reckitt representative declined to comment. Pharmstandard did not respond to Izvestia's request.

Reckitt Benckiser is one of the world's largest manufacturers of consumer goods (FMCG). He specializes in household chemicals and medical products. The brand portfolio includes Cillit Bang, Vanish, Tiret, Calgon, Finish, and Dosia, the painkiller Nurofen, Strepils tablets, Durex and Contex condoms, Veet depilation products, and Evitest pregnancy tests. The group was formed in March 1999 as a result of the merger of British Reckitt & Colman and Dutch Benckiser.

Photo: Global Look Press/Hendrik Schmidt

The first Russian representative office appeared in 1994 in St. Petersburg. After the merger in 1999, a new office was opened in Moscow. In 2005, the company launched a cleaning and detergent manufacturing plant in Klin, Moscow region, employing about 1.3 thousand people. Reckitt has two legal entities in our country — Reckitt Benckiser Healthcare LLC (90% owned by the British parent company, the remaining 10% by the German division) and Reckitt Benckiser LLC (100% controlled by the parent British organization). By the end of 2023 (the latest available data), the combined revenue under RAS of the two subsidiaries amounted to 30.1 billion rubles, which is 4% less than a year earlier. Net profit for the same period fell by a quarter, to 5 billion rubles.

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In the spring of 2022, Reckitt announced its intention to exit the Russian business by transferring assets to a third party or local top management. On March 10, the group announced that it was suspending all advertising contracts, promotion and sponsorship projects in the Russian Federation, as well as freezing all investments in the country. On July 19, 2023, it was reported that the company had changed its mind about leaving the Russian Federation, but on the same day it denied these reports.

Photo: IZVESTIA/Polina Violet

Reckitt remains one of the leaders of the Russian market not only for household chemicals, but also for pharmaceuticals, recalled Nikolai Bespalov, Executive Director of RNC Pharma. According to his estimates, the drug segment of this business may amount to 13-18 billion rubles. Investment banker Ivan Peshkov estimates all of Reckitt's Russian assets at 30-40 billion, including debt. At the same time, according to him, the real cost may be higher: at the end of 2023, the company had no credit debt, and the amount of funds in the accounts exceeded 9 billion rubles. However, it will be difficult to sell the asset at a full price due to current regulatory requirements, he said. According to the expert, the deal assumes a discount of at least 60%, as well as a mandatory voluntary contribution to the federal budget of at least 35% of the market value.

How is the household chemicals market changing in Russia

In many ways, the interest in the asset is due to its brands, according to a top manager of a large pharmaceutical company. The fact is that the British do not produce medicines on the Russian site. The local division operates as a sales representative of the manufacturer, he said. The trademarks, rather than the production itself, are of the greatest interest, an investment banker close to the British side agrees. Reckitt wanted to get rid of the asset for a "high price," he said. At the same time, she is not ready to give the rights to the brands to a new owner, the interlocutor explained the details of the negotiations. Although a potential buyer would be satisfied with the format "according to the Henkel model," added an acquaintance of Viktor Kharitonin.

Photo: IZVESTIA/Eduard Kornienko

The German manufacturer of household chemicals Henkel announced its withdrawal from the Russian market in April 2022. In 2023, its local division began operating under the new commercial name LAB Industries. And the company itself began to Russify brands: Persil washing powders, Vernel air conditioners, Bref toilet blocks appeared on sale. In the same year, a consortium of investors with Viktor Kharitonin's Augment Investments became the buyer of the business. The deal amounted to 54 billion rubles.

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In April, Reckitt Benckiser filed several trademark applications for household chemicals classes at once, according to Rospatent data. Among them are Fiesto, Brillit Blast, Resolve. The Russian structure continues to replace global brands with local analogues in response to sanctions restrictions, Ivan Peshkov said.

Photo: RIA Novosti/Kirill Braga

According to the results of 2024 (this is the latest available data), the production of household chemicals in the Russian Federation amounted to 3.18 million tons, which is 2.4% less than a year earlier, the Businessstat agency estimates. His analysts attribute the decline in output to a shortage of imported components and raw materials. In particular, the production of washing powders depends on the supply of enzymes and defoamers, which are not yet produced in Russia.

According to Ivan Peshkov, brand registration is aimed at forming a local brand portfolio. Moreover, the acquisition of the local Henkel business gave the new owners valuable experience. In synergy with Reckitt's assets, this could strengthen its position in the Russian market of household chemicals and household goods, he believes.