SLOUGH, UNITED KINGDOM — Reckitt Benckiser has entered into an agreement to acquire the Mead Johnson Nutrition Co. for $17.9 billion. The purchase price includes $90 in cash per share of Mead Johnson stock for a valuation of $16.6 billion plus the assumption of the infant and children’s nutrition company’s debt.
|Rakesh Kapoor, c.e.o. of Reckitt Benckiser|
“The acquisition of Mead Johnson is a significant step forward in R.B.’s journey as a leader in consumer health,” said Rakesh Kapoor, chief executive officer of Reckitt Benckiser. “With the Enfa family of brands, the world’s leading franchise in infant and children’s nutrition, we will provide families with vital nutritional support.
“This is a natural extension to R.B.’s consumer health portfolio of Powerbrands, which are already trusted by millions of mothers, reinforcing the importance of health and hygiene for their families.”
Mr. Kapoor added that Mead Johnson’s geographic footprint will strengthen Reckitt Benckiser’s position in developing markets, which will account for approximately 40% of the combined group’s sales, with China becoming the company’s second largest market.
Reckitt Benckiser valued the infant and children’s nutrition category as worth approximately $46 billion, and management expects the category to grow at 3% to 5% annually in the medium and long term. The growth projection is underpinned by demographic trends in developing markets, according to the company.
|Kasper Jakobsen, c.e.o. of Mead Johnson Nutrition|
“This transaction recognizes the value of our leading brands and strong, global organization,” said Kasper Jakobsen, c.e.o. of Mead Johnson Nutrition. “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. We are pleased that our shareholders have an opportunity to recognize significant and immediate value and are excited for the new opportunities for our employees as part of a larger company.”
During fiscal 2016, Mead Johnson Nutrition generated sales of $3,743 million. Approximately 80% of the company’s sales come from its Enfa family of brands. The company’s three leading markets were China, the United States and Mexico.Closing of the transaction is subject to normal conditions, including approval by shareholders of both Mead Johnson and Reckitt Benckiser and regulatory approvals, and is expected to occur during the third quarter of 2017.