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Reckitt Benckiser acquisition of MJN confirmed 10Feb

RB to acquire Mead Johnson for $90 per share in cash, valuing Mead Johnson’s equity at $16.6 billion. Total value of the transaction is $17.9 billion including Mead Johnson’s net debt Significant step forward in RB’s journey as a global leader in consumer health.

The Enfa franchise is the global #1 in the attractive infant and children’s nutrition category Mead Johnson brings significant R&D, quality, regulatory and specialist distribution capabilities to RB. Considerably strengthens RB’s presence in developing markets, particularly China. RB’s expertise in consumer centric innovation, scaling global brands and commitment to driving performance will enable long term value creation Goal for Mead Johnson business to perform at the upper end of estimated category growth of 3‐5% per annum in the medium to long term Estimated £200 million in annual cost savings by the end of the third full year.

Expected to be accretive to adjusted diluted EPS in the first full year and double‐digit accretive by year 3 Return on invested capital projected to exceed RB’s cost of capital by year 5 Committed debt financing in place; RB expects to retain a strong investment grade credit rating Subject to shareholder and regulatory approvals; expected completion by the end of Q3 2017.

Rakesh Kapoor, Chief Executive Officer of RB, said:“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 Power Brands which are already trusted by millions of mothers, reinforcing the importance of health and hygiene for their families. Mead Johnson’s geographic footprint significantly strengthens our position in developing markets, which will account for approximately 40% of the combined group’s sales, with China becoming our second largest Power Market.

We are confident that our culture of consumer centric innovation and our expertise in scaling global brands will deliver significant growth for the Mead Johnson portfolio. We will draw on the best of both businesses and continue to build on Mead Johnson’s extensive R&D, quality, regulatory and specialist distribution capabilities. For investors, we have delivered total shareholder return of over 150% over the past 5 years.

I am confident that, with the addition of the Enfa franchise as the largest Power Brand in our portfolio, we will continue to deliver for shareholders and on our strategy to make a difference by giving people innovative solutions for healthier lives and happier homes.” James Cornelius, Mead Johnson Chairman of the Board, said:

“The agreement being announced today is about value creation. First and foremost, this transaction provides tremendous value to Mead Johnson Nutrition stockholders. Additionally, relative to the future growth and development of the Mead Johnson business, Reckitt Benckiser – with its strong financial base, broad global footprint, consumer branding expertise and dynamic business model – is an ideal partner.

I have been part of the journey of Mead Johnson Nutrition from its days as an operating division of Bristol‐Myers Squibb through the past eight years as an independent public company and now into this powerful new business combination. I fully expect Mead Johnson to flourish as an important new part of the RB organisation. For all of these reasons and more, this transaction has my full support and endorsement, as well as that of my fellow Board Members



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