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Reckitt Benckiser to Acquire Mead Johnson for USD16.6 Billion

British multinational consumer goods company to acquire baby food company, Mead Johnson

 

China: Reckitt Benckiser, the company behind Durex, Nurofen and Dettol, is acquiring U.S. baby maker Mead Johnson for USD16.6 billion to help the company grow in China. The company offered USD90 to Mead Johnson for each share. Reckitt Benckiser owns the top brands such as Durex condoms, Mucinex cough remedy, Dettol and Lysol cleaners.

After Nestlé and Danone, Mead Johnson is third largest baby food company in the world. The company manufactures main infant nutrition brand in the world i.e. Enfa formula, combined with Lactum, Choco Milk and other milk-based products for children. The acquisition will help the company in competing with consumer MNCs Unilever, Nestle, Danone and Procter & Gamble, by adding baby food to its vast household products portfolio.

According to TechSci Research, the global baby food market is forecast to grow at a significant pace in the coming years. The only substitute for breast milk is infant formula. Infant formula provides a convenience and satisfaction for mothers, who do not wish to breast feed, as well as alternative for mothers, who are unable to breast feed. Mothers can choose to use formula as the sole source for nutrition for their infant as alternative supplement for breastfeeding. With increasing labour participation in China, the women will not be able to breast feed their children on time. So, the best alternative to feed their kids is through infant formula, this will outpace the growth of Reckitt Benckiser in Baby Food Market of China.

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