Nestle Danone, the world’s third largest maker of baby food and that the new buyers Mead johnson. "The Wall Street journal" reported that Reckitt group is negotiating to buy Mead Johnson, reflecting the Reckitt group to enter the consumer healthcare business ambitions.
according to "the Wall Street journal" reported that the total acquisition of Reckitt Mead is about $16 billion 700 million in cash and the issuance of bonds in the form of payment. The deal is likely to be the biggest acquisition ever made by Li jie. Reckitt said, the two companies to negotiate a price of $90 per share cash payment, the price is 29% premium to Wednesday’s closing price of Mead johnson. As of February 1st the time of closing, Mead Johnson’s $12 billion 840 million.
Euromonitor International data show that Mead Johnson is the world’s third largest maker of baby food, baby food 10% share of the global market, after the Nestle and danone. In the Asian market after the baby milk powder, Mead Johnson Nestle, with 12% market share. According to Bloomberg, Mead Johnson shares fell 34% from the peak in 2015, partly because China countries such as the re emergence of breastfeeding. Last year, Mead Johnson by sales of $3 billion 700 million, down 8%, about half of the sales revenue from Asia, Latin America accounted for about 19%, North America accounted for 31%.
group was founded in 1823, is to produce a variety of health, health and home care fast consumer goods known as the global enterprise. The current total market capitalization of $56 billion, owns Durex, Shuang Jian, Veet, and other famous brands of dettol.
in recent years, the field of infant formula has attracted worldwide interest in acquisitions. In 2014, Danone Group for China infant formula producers Yashili international holdings to pay about $566 million acquisition of 25% equity Co. ltd.. In 2012, Pfizer Inc sold its infant nutrition business to Nestle, earning nearly $12 billion. The global retail market for infant formula is expected to reach $80 billion by 2018.
The consumer health care market
acquisition of Mead Johnson can help Reckitt into higher profits. According to the Financial Times reported that third quarter profit was hit hard clean. Its sales in the South Korean market caused some of the consumers of disinfectant serious lung injury and certain diseases, so had to come up with a large amount of compensation. At the same time, Russia’s slow growth in demand, but also affected the FMCG company’s revenue.
this acquisition will also enhance the group’s ability to control the rapid growth of the Asian market. In December last year, Bloomberg industry research pointed out that although there are a number of small companies to enter the milk market triggered a price war, but baby food is still the fastest growing food category in the Asian market. Long term, comprehensive two-child policy will improve the China formula demand, Indonesia and Vietnam and other Southeast Asian countries will have more and more women into the workplace, resulting in the need for baby milk.