RB.L) mentioned it was in superior talks to purchase child components maker Mead Johnson Nutrition Co (MJN.N) in a $16.7 billion deal that might take it in a brand new route and enhance its enterprise in Asia.
Reckitt Benckiser mentioned late on Wednesday night time it could pay $90 in money for every Mead Johnson share, a 29.5 % premium to Wednesday’s shut.
Shares of Mead Johnson, lengthy rumored to be a takeover goal for Danone (DANO.PA), jumped 22 % in after-market buying and selling.
Mead Johnson, which makes Enfamil child components, has been seen as a gorgeous takeover goal since being spun off from drugmaker Bristol-Myers Squibb in 2009, due partly to its huge worldwide footprint in Latin America and Asia.
Reckitt’s proposed worth represents a a number of of 17 occasions Mead Johnson’s estimated 2017 earnings earlier than curiosity, tax, depreciation and amortization (EBITDA), mentioned analysts at Wells Fargo, falling wanting the 20 occasions Nestle (NESN.S) paid for Wyeth in 2012 and the 22 occasions Danone paid for Numico in 2007.
Still, the premium is in step with different current client staples offers, and is suitable given regulatory adjustments in China and worth promotion, Wells Fargo mentioned.
Reckitt Benckiser, which makes Durex condoms, Nurofen tablets and Scholl footcare merchandise, mentioned it anticipated to finance the proposed deal via money and debt.
Sources informed Reuters in 2014 that Danone was all for shopping for it, however the French firm agreed late final 12 months to purchase WhiteWave (WWAV.N) as an alternative.
The Wall Street Journal first reported on the deal.
(Reporting by Martinne Geller in London, Sruthi Shankar in Bengaluru and Lauren Hirsch in New York; Editing by Alan Crosby, G Crosse and Gopakumar Warrier)