British consumer health giant Reckitt Benckiser on Friday gobbled US infant and child nutrition specialist Mead Johnson for $16.6 billion in a takeover which targets rapid expansion in Asia. The friendly deal, worth the equivalent of 15.5 billion euros, was pitched at $90 per share and will "significantly strengthen" its presence in developing markets like China, Reckitt said in a statement.
The transaction will also take Reckitt, whose brands include Durex condoms and Nurofen painkillers, into the baby-food market for the first time. The deal, which values Illinois-based Mead Johnson at $17.9 billion including debt, is expected to generate £200 million of annual cost savings within three years of completion. "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. Under Kapoor's leadership, Reckitt has been on the lookout for a major acquisition for some time, and the Mead takeover will boost its US and Asia business and expand its health division.
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