Reckitt Benckiser Sheds Nearly $7 Billion in Market Value After Infant-Formula Verdict — Update

By Michael Susin

Reckitt Benckiser lost almost $7 billion in market value after a jury in an Illinois court sided with a plaintiff in a case relating to its Enfamil infant formula.

London-listed shares in the U.K. consumer-goods company closed nearly 15% lower at GBP44.86 on Friday, according to FactSet, giving the group a market value of almost GBP31.95 billion ($40.74 billion).

The rout came after it was reported that an Illinois jury ordered the company's infant-formula unit, Mead Johnson, to pay $60 million in compensation related to the death of a premature baby who was fed Enfamil.

Reckitt--which houses Dettol, Harpic and Durex among its brands--said Friday that it strongly disagrees with the jury's decision to fault Mead Johnson and that it doesn't believe any of its products cause necrotizing enterocolitis, a life-threatening gastrointestinal disease.

"We will pursue all options to overturn the verdict," it said, adding that the allegations from the plaintiff weren't supported by the science.

Mead Johnson Nutrition Company was acquired by Reckitt in June 2017.

"Based on the size of this fine, the share move is massively overstating the initial impact, which suggests investors are preparing for more to come," Hargreaves Lansdown head of money and markets, Susannah Streeter, said in market comment.

Write to Michael Susin at michael.susin@wsj.com

(END) Dow Jones Newswires

March 15, 2024 14:03 ET (18:03 GMT)

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