Reckitt Benckiser purchase for $16.6 billion manufacturer of Sustagen

The British consumer goods company RB (Reckitt Benckiser)-owner of brands such as See, SBP and Vanish-announced on Friday (10/2) the purchase of the product manufacturer of infant nutrition Mead Johnson, maker of milk supplement Sustagen and Enfamil Nutramigen and brands, for $16.6 billion. Including debt, the value reaches $17.9 billion.
The RB will pay $90 per share of Mead Johnson, a premium of 29% over the closing price on the 1st of February, before they start rumors about the negotiation.
"As part of Reckitt Benckiser, a larger business focused on health, recognized by your sales capacity, we will have benefits like increased scale and diversification," said Kasper Jakobsen, Chief Executive of Mead Johnson.
"Mead Johnson significantly strengthens our geographic presence in developing markets, which account for about 40% of the combined sales of the group," said Rakesh Kapoor, President of RB. The company will gain relevance mainly in China. The RB estimates annual savings of 200 million pounds sterling with the acquisition at the end of the third year of integration.
The Mead Johnson, third largest in the global market of infant nutrition, valued at $46 billion annually, must have performance in the highest range of growth of 3% to 5%, yearly, provided for the category in the medium to long term, according to RB.
The Mead Johnson develops, manufactures and distributes more than 70 products in 50 markets. The transaction was unanimously approved by your Board of Directors. The Mead Johnson will be a new Division of RB.
The deal is subject to shareholder approval of both companies and regulatory guarantees. The transaction should be completed in the third quarter of this year.