Reckitt Benckiser Group, a U.K. based consumer health and hygiene company. said it will acquire Glenview-based Mead Johnson Nutrition in a deal valued at approximately $17.9 billion
Mead Johnson, the maker of Enfamil and Nutramigen brand baby formula, will become a new division of RB, the company said. The addition of its product line will diversify RB’s global portfolio. The company has operations in over 60 countries, with headquarters in London, Dubai and Amsterdam, and employs approximately 37,000 people worldwide.
Mead Johnson board of directors has already approved acquisition, which is expected to occur during the third quarter of 2017.
“As part of Reckitt Benckiser, a bigger health care focused business recognized for its marketing capabilities, we will derive benefits from both increased scale and diversification,” said Mead Johnson CEO Kasper Jakobsen.
RB’s Chief Executive Officer Rakesh Kapoor said the acquisition will help the company expand further into China.
“Mead Johnson’s geographic footprint significantly strengthens our position in developing markets, which account for approximately 40 percent of the combined group’s sales, with China becoming our second largest ‘Powermarket,” Kapoor said. “We will draw on the best of both businesses and continue to build on Mead Johnson’s extensive R&D, regulatory, quality and specialist distribution capabilities.”
Mead Johnson’s extensive R&D, regulatory, quality and specialist distribution capabilities.”
Reckitt Benckiser’s biggest-ever takeover boosts growth prospects as sales advance at the slowest pace in more than five years amid tough conditions in Europe and emerging markets like Brazil. A $480 million breakup fee reduces the chance of a counter-offer for Mead Johnson, which has been touted as a takeover candidate since it went public in 2009.
“This deal has potential to reignite top-line growth, the only area where the Reckitt model appears lacking,” said Deborah Aitken, an analyst at Bloomberg Intelligence.
Goldman Sachs acted as Mead Johnson’s lead financial adviser. Morgan Stanley also acted as financial adviser to the company. Kirkland & Ellis LLP acted as Mead Johnson’s legal adviser.
Bloomberg News contrubuted to this report
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