UK/US: Reckitt targets Mead Johnson with a $16.7 billion bid

Reckitt Benckiser emerged as a surprise suitor for perennial bid candidate Mead Johnson Nutrition, starting talks on a $16.7 billion purchase of the baby-food maker to build its faster growing consumer-health business and its presence in Asia.

The maker of Lysol cleaners said late Wednesday it’s in advanced negotiations to acquire the US company for $90 a share in cash in what would be the second-biggest acquisition by a British company since the Brexit vote.

Speculation of a bid for Mead Johnson has been rife since the maker of Enfamil went public in 2009, though Nestlé and French yogurt maker Danone have been considered the most likely buyers. Reckitt Benckiser Chief Executive Officer Rakesh Kapoor is striking as Danone is busy trying to complete its $10 billion acquisition of organic food maker WhiteWave Foods. Nestlé, whose new CEO just started last month, would face too many antitrust obstacles in such a transaction, analysts at RBC Europe have said.

“Reckitt Benckiser had never even been considered as a potential acquirer,” Andrew Wood, an analyst at Sanford C. Bernstein, said in a note. “Infant formula was considered too far away from its core business. Hence the news was very surprising to us.”

Full Content: Independent

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