Consumer group Reckitt has initiated a strategic review of its infant formula business, Mead Johnson, and plans to sell a large portfolio of its home care brands, including Air Wick and Cillit Bang, to streamline its operations.

Mead Johnson, acquired by Reckitt in 2017 for $17 billion, has faced several challenges, including recent litigation in the US over a premature infant formula product. This situation has prompted calls for the company to consider selling the business.

In addition to exiting its slower-growing home care brands and potentially selling Mead Johnson, Reckitt announced a comprehensive restructuring plan. This plan aims to eliminate several management layers and reduce its fixed cost base, which has been criticized as being too high compared to its peers.

Going forward, Reckitt will report as three divisions: Reckitt, which includes high-performing brands like Nurofen and Gaviscon; Essential Home, which encompasses the lower-growth home care brands; and Mead Johnson.

The sale of the home care portfolio, which generates £1.9 billion in revenue, along with a potential sale of Mead Johnson, would leave Reckitt with net revenues of £10 billion, compared to £14.6 billion for the entire group in 2023.

However, finding a buyer for Mead Johnson may prove challenging due to ongoing US litigation. In March, an Illinois court awarded $60 million in damages to a mother whose child died after consuming a Mead Johnson formula, which resulted in a £5 billion drop in the company’s market value.

Reckitt previously sold Mead Johnson’s Chinese unit for $2.2 billion to local private equity group Primavera in 2021 and later attempted, unsuccessfully, to sell the remainder of the baby formula business for $7 billion to $10 billion. In 2020, Reckitt announced a $5 billion writedown on the acquisition, citing declining birth rates and increased local competition in China.

Mirroring Unilever’s strategy from last year, Reckitt stated it would concentrate on its high-growth, high-margin “power brands” and labeled the Mead Johnson business as “non-core.” The company is considering “all strategic options to maximize shareholder value.”

Reckitt also announced a reorganization and cost-saving program, which will incur a one-time cost of £1 billion. The group lowered its sales growth expectations for this year, forecasting revenue to rise by 1% to 3% in 2024, down from previous expectations of 2% to 4%.