Reckitt Benckiser gulps US baby food firm Mead Johnson

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LONDON: British consumer health giant Reckitt Benckiser, which makes Durex condoms and Nurofen painkillers, said Friday it has agreed to buy US infant and child nutrition specialist Mead Johnson for $16.6 billion.

The friendly takeover, worth the equivalent of 15.5 billion euros, was pitched at $90 per share and will “significantly strengthen” the group’s presence in developing markets like China, Reckitt said in a statement.
Including debt, the deal values the Illinois-based firm at $17.9 billion.

“The acquisition of Mead Johnson is a significant step forward in Reckitt Benckiser’s journey as a leader in consumer health,” said Chief Executive Rakesh Kapoor.

He described Mead Johnson’s “Enfa” baby food brands as “a natural extension” to Reckitt Benckiser’s consumer health portfolio.


The transaction would also strengthen the British group’s position in developing markets—which will account for approximately 40 percent of the combined group’s sales.

The deal represented a premium of 29 percent over Mead’s stock closing price on February 1, which was the day before the pair confirmed takeover talks.

Mead Johnson Chairman James Cornelius said the deal would provide “tremendous value” and described Reckitt Benckiser “with its strong financial base, broad global footprint, consumer branding expertise and dynamic business model (as) an ideal partner.”

Mead Johnson sells 70 products in over 50 countries, including its flagship “Enfa” line.

The US company, which booked a net profit of $545 million in 2016 on sales of $3.7 billion, generates nearly half its revenues in Asia.

Mead Johnson belonged to Bristol-Myers Squibb until 2009, when its shares were floated on the stock exchange. It has regularly been the focus of takeover speculation, with food giants Danone and Nestle previously tipped as potential buyers. AFP

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