Condom maker to buy infant formula producer Mead Johnson

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In a release filed with the London Stock Exchange on February 10, Reckitt Benckiser Group Plc. (RB) said it had signed a merger agreement with Mead Johnson Nutrition Company. Accordingly, Mead Johnson shareholders will receive $90 in cash for each share of common stock, valuing the total equity at $16.6 billion.

According to RB, the acquisition of Mead Johnson is aligned with its well-established strategic focus on consumer health and on investing in Powerbrands with attractive growth prospects.

"The acquisition of Mead Johnson is a significant step forward in RB's journey as a leader in consumer health. 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 RB's consumer health portfolio of Powerbrands which are already trusted by millions of mothers, reinforcing the importance of health and hygiene for their families,” said Rakesh Kapoor, CEO of RB.

With the deal, it seems that RB is aiming for growth mostly in developing markets.

“Growth in the category is underpinned by demographic trends, particularly in developing markets, such as economic growth, urbanisation, increasing spending on premium nutrition, special nutritional needs, a higher proportion of mothers choosing to work while their children are young, as well as changes to China's one-child policy,” stated the release.

“Mead Johnson's geographic footprint significantly strengthens our position in developing markets, which will account for approximately 40 per cent of the group's combined sales, with China becoming our second largest Powermarket,” said Kapoor.

In Vietnam, RB is best known for cough drop Strepsils. Mead Johnson, meanwhile, has an extensive portfolio of formulae for mothers and children under the Enfa brand.

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