Canned infant formula manufacturer Mead Johnson could become part of the Reckitt Benckiser Group if a US$16.7 billion bid by the British health and household products manufacturer is successful.
US-based Mead Johnson is one of the biggest suppliers of dairy-based baby foods, a market worth $41 billion, with strong growth in sales to China and India.
The two companies have revealed that they have been in talks for the past week or more. UK-based Reckitt said, “the parties are presently engaged in a period of due diligence and contract discussion”, adding that a further announcement would be made as appropriate.
Mead Johnson added that it is in discussions with Reckitt Benckiser with respect to its proposal to acquire the outstanding shares of MJN for $90 per share in cash. At the time this was a 29.5 percent premium to Mead Johnson’s closing price.
With yearly sales of about $3.6bn, Mead Johnson is the world’s second largest infant formula manufacturer with its Enfamil brand. It was spun off from US drug maker Bristol-Myers Squibb in 2009. It markets and distributes more than 70 products in more than 50 markets worldwide
Reckitt Benckiser is best known for its portfolio of brands that includes Dettol, Durex, Airwick, Vanish, Scholl, Nurofen, Gaviscon, Cillit Bang, Finish and Harpic, with sales of almost £10 billion a year.