Reckitt Benckiser in talks for Mead Johnson

CONSUMER GOODS giant Reckitt Benckiser has made a US$16.7bn bid to buy US baby milk formula company Mead Johnson.

Reckitt Benckiser, whose brands include Dettol, Nurofen, Durex and Air Wick, says that it is now in “advanced negotiations” with Mead Johnson, and that the two companies are carrying out due diligence and contract negotiations.

The US$90/share offer represents a 30% premium on Mead Johnson’s share price before news of the takeover talks emerged. Mead Johnson’s signature brand is Enfamil, and it is considered to be one of the world’s leading companies in infant formula and paediatric nutrition. Its total sales topped US$4bn in 2015. The company confirmed that it is in talks with Reckitt Benckiser but declined to give further information to the media.

Analysts believe that Reckitt Benckiser is keen to increase its exposure to US markets. The company has been known to be searching for takeover targets.

Both companies caution that a deal is not certain and that no formal agreement has yet been reached.