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Reckitt Benckiser buys US baby formula firm

by LLB Reporter
10th Feb 17 10:03 am

Take a look at the deal…

Reckitt Benckiser has come to an agreement to buy US baby formula maker Mead Johnson for $16.6bn (£13.2bn).

The maker of both Durex and Dettol said the new move will help it grow in China and would provide “a significant step forward” as it aims to become a “leader in consumer health”.

Mead Johnson makes baby formula under the name of Enfa and saw sales of $3.7bn in 2016.

The deal will be worth $17.9bn once Mead Johnsons debt is taken into account.

After China made the decision to scrap its one child policy in 2015, it could be an opportunity for consumer goods companies.

China’s birth rate was the highest this century, number rose by 7.9 per cent, or 17.86m, on 2015.

Due to these results, analysts expect to see a higher demand for food, formula, clothes and medicine.

Mead Johnson chairman James Cornelius said that Reckitt’s offer would bring “tremendous value” to shareholders.

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