LONDON (ShareCast) - Reckitt Benckiser Group, the British consumer goods company, has signed a three-year collaboration agreement with Bristol-Myers Squibb (BMS), under which Reckitt will licence a number of Latin American consumer health care brands from BMS.
Under the terms of the agreement RB will initially pay BMS $482m to enter into the arrangement which also includes personnel, supply contracts and an option to acquire legal title to the related intellectual property at the end of the collaboration period, based on business performance.
The company will have the option to purchase at the end of the three year period.
Rakesh Kapoor, Reckitt Benckiser (LSE: RB.L - news) 's Chief Executive Officer, said: "This transaction creates a material consumer health care platform, infrastructure and distribution network for RB in both Brazil and Mexico. As such it is an important step in building our consumer health care presence in Latin American emerging markets.
"These market-leading brands have strong margins and I firmly believe they have extremely good growth potential. They fit into our existing over-the-counter categories of pain relief, sore throat, cough and cold, anti-acid, and dermatological and will benefit from RB's consumer marketing and innovation capabilities, and our significant levels of brand equity investment."
Under the terms of a separate supply agreement BMS will be RB's supplier of the products during the collaboration period.
The share price climbed 1.2% to 4,286p by 13:20.